Solar power project synopsis

1. FINANCING GRID CONNECTED SOLAR ROOFTOP PROJECTS
A PRESENTATION
BY
SHRI ANAND AGARWAL, AGM
PUNJAB NATIONAL BANK

2. Why Solar In India Is The Opportunity Of A Lifetime
 Solar In India is one of the biggest single measures to save the Global Climate and backbone of
India’s future energy economy.
 India receives nearly 3000 hours of sunshine every year which is equivalent to 5000 trillion kWh of
energy.
 India has option of building its future energy infrastructure around solar, rather than coal.
 Government of India through MNRE is promoting the use of renewable energy sources to meet the
energy demand of the country and also the future requirements of power in the fast growth of
economy.
 Government of India has taken an ambitious target of 100 GW of solar power by year 2022 out of
which 40 GW is to be achieved through rooftop solar as a part of clean climate commitments.
 Government of India wants solar to grow by an incredible 55% per year to make India the largest
solar market globally. Over the years the cost of solar power has fallen significantly to make it a
very competitive source of energy.
 There is need to encourage the end users to build their own solar solutions and organizing
capacity building programmes and also to consider incentives, such as subsidies and conducive
regulations such as net metering and uniform policy for PPA from DISCOMS.
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3. Grid Connected Rooftop And Small Solar Power Plants
 The detailed guidelines for implementation of “ Grid Connected Roof Top and
Small Solar Power Plant” have been issued vide MNRE circular dated June 26,2014.
 A large potential is available for generating solar power using unutilized space on
rooftops.
It could be tapped by the individual household as well as industrial /commercial
entrepreneurs, Government Institutions, educational institutions, hotels and hospitals
etc .
 Solar Rooftop shall partly fulfill captive requirement of such users and surplus if
any to be fed into the grid through two way metering system. Solar Rooftop will also
reduce the transmission losses as electricity is generated at the consumption center
itself.
The minimum and maximum capacity of the plant eligible under this programme is
1kWp and 500kWp respectively.
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4. Financing of Solar Power Projects under Priority Sector
As per RBI circular no. RBI/2014-15/573 dated April 23,2015
all advances up to a limit of Rs 15.00 crore for purposes like
solar based power generations and for non conventional
energy shall be classified under priority sector.
For individual households loan up to Rs 10 lakh per borrower
shall come under priority sector.
Bank has issued the guidelines on the same lines.
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5. 5
Policies of the Bank to cater Rooftop Solar
Power Projects in different segments
Bank has suitable policy/ draft policy for financing
Rooftop Solar Power projects under different segments
as below :
 Retails customers- Housing segment (Policy Issued)
MSMEs (Draft Policy)
Industrial, Commercial, Institutions and Hospitals etc
(Draft Policy)

6. Financing of Rooftop Solar in Residential Sector
The Bank has laid down policy for financing rooftop solar to the individuals under the
residential segment with the following salient features:
 Loan Amount: Maximum upto Rs 10 lakh per borrower
 Margin :
• 20-25% where mortgage of the household property is available with the Bank.
• 30% for all loans on standalone basis.
 Repayment:
• Maximum upto 30 years as linked with the housing loan or as per repaying capacity of
the individual.
• Maximum upto 5 years for loans on standalone basis..
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7.  Rate of Interest:
• Rate of Interest is linked to the housing loan and mortgage of the property to the Bank as
below-
 Floating: ( General): 1 year MCLR + 0.05% i.e 9.30% at present
 Floating: (PNB Pride*): 1 year MCLR
(*PNB Pride is for Central/ State Government Employees / Defence Personnel and Para
Military Forces.)
 Fixed : (General) : Floating General+0.50% i.e 9.80% at present.
Fixed : (PNB Pride) : Floating PNB Pride+0.50% i.e 9.75% at present.
• For financing of Standalone Solar System: one Year MCLR + 2.10%.
• Subsidy: MNRE will disburse subsidy directly to the Bank after receipt of claim along
with the details of the beneficiary through online portal. The detailed guidelines for
claiming subsidy by the branches shall be issued after receiving the same from MNRE.
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8. Draft Scheme for Financing Solar Rooftop Projects
(Other than Residential Segment)
 The Scheme shall cover financing of solar rooftop projects to MSME /
Industrial/ Commercial / Institutional borrowers as per latest directives from RBI /
MNRE / SECI.
 Minimum capacity for financing under the scheme shall be 10kWp.
 The proposed scheme shall cover only grid connected solar rooftop projects
having credit risk rating of B3( Investment Grade) and above.
 Margin: Minimum margin under the scheme is proposed at 25% excluding
any subsidy / finance received from Government/ MNRE. However in those
cases where 70% subsidy shall be received from MNRE, the minimum margin
shall be 25% at the initial stage and same shall be 10% after commissioning of
the project and receiving of subsidy / finance.
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9.  Security:
Charge of the primary security in favour of the bank.
 Collateral Security:
• For Loan upto Rs 10 lakh to MSME which are eligible for coverage under
CGTMSE- No collateral Security.
• For other Loans: Minimum 100% collateral security. In case of aggregator
category charge on movable/ immovable assets of the firm / equitable mortgage of
immovable properties belonging to promoter / family members and guarantors etc.
Pledge of fixed deposit receipts, third party deposits and/or assignment of LIC
ploicy of the individual / promoters, pledge of promoters share etc may be
considered. The value of tangible collateral security should not be less than 100%
of the loan amount.
 Rate of Interest: As per MCLR based interest rate structure linked with internal
and external risk rating.
 Upfront fee and documentation charges: As per extant guidelines.
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10.  Repayment Period: Maximum Repayment period upto 10 years including moratorium
period of 1 year.
The sanctioning authority may extend the repayment period upto 15 years in A4 and
above rated accounts.
 Technical Appraisal: Techno Economic Viability(TEV) study shall be mandatorily
conducted by the TEV cell / Technical officer at Circle Office upto project cost of Rs
5.00 crore.
 TEV study for project having cost above Rs 5.00 crore shall be done by HO TEV cell or
TEV consultant empanelled by the Bank as per Bank guidelines.
 All the technical specifications of the scheme are incorporated as per MNRE
guidelines.
 Sensitivity Analysis On reduction in tariff collection and plant load factor by 5% and
increase in Rate of Interest (by 100bps)
 ESCROW / TRA Account: Tariff received from sale of power / other sources shall be
deposited in TRA. The borrower shall additionally maintain DSRA wherein one / two
quarter interest shall be maintained
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11. Our Glorious Achievements
PNB has financed World’s Largest Rooftop Solar Photovoltaic plant of 19.5
MW on a single roof (Rooftop Area of 3,31,842 Sq. Mtr) generating energy
to the extent of 27 Million Units per annum at a project cost of around 139
crore at Dera Baba Jaimal Singh, Beas, Amritsar, Punjab.
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