High land cost,shy banks shadow sun power sector

It’s a cause of worry,for if the projects do not start as per plan,Punjab will not be able to abide by an amendment in the Electricity Act,2003,which has made it mandatory for state electricity regulatory commissions to set targets for distribution companies to purchase certain percentage of their total power requirement from renewable sources.

At present,Punjab has only one commissioned solar project – Azure Power’s 2-MW plant in Amritsar – while eight others are supposed to start this September. These eight include seven projects totaling 8.5 MW under Jawaharlal Nehru National Solar Mission and one 5-MW project of EBS Inc under NTPC Vidyut Vyapar Nigam (NVVN) that will be commissioned by July. With these,the state is expected to generate 15.5 MW this year.

Jessi Singh,president of EBS Inc,says he is setting up a 5-MW plant on 25 acres that he has taken on lease. Banks are a bit reluctant to finance,as renewable energy is a relatively new sector with no track record to follow,he says.

HS Brar,CEO of Carlill Energy Private Limited,who is setting up a 1.5-MW plant in Bhagsar village in Muktsar on 10 acres owned by him,seconds Jessi. “Financing is a problem,but I think this roadblock will be cleared soon,as the government is being helpful,” he says.

Some of the developers who have written a sunshine story in other states feel that Punjab should provide land out of a pool,as is being done in Rajasthan. One such entrepreneur is Rakesh Singh,co-founder and chief operating officer of Staten Solar that has offices in Silicon Valley in California and in India. Financial institutions are shaky despite the fact that power purchase agreements have been signed with the respective state governments,he says.

Asserting that banks should not ask for output guarantee,Singh,who has been working on projects in Rajasthan and Madhya Pradesh,says,“This is also a business and risk factor will have to be kept in mind.” Offering a nugget of wisdom to Punjab entrepreneurs,he says,“For our MP project,we have taken low-interest loan from US Exim Bank,with a condition that we buy 80 per cent of the equipment from the US,and that is fine with us.”

CEO of Punjab Energy Development Agency (PEDA) TPS Sidhu says,due to the high land cost,the government has been banking on rooftop panels,and wants to use roofs on all buildings,sheds of Mandi Board and warehouses.