India’s solar PV goals are serious business to Ex-Im Bank: 2 new loans announced

The US Ex-Im Bank released news of 2 big loans (totalling more than $25 million) to First Solar (AZ) and Abound Solar (CO) to support exports to utility-scale solar power plants in India.

July 18, 2011 — The Export-Import Bank of the United States (Ex-Im Bank) released news of 2 big loans to US-based thin film solar photovoltaic cell manufacturers — First Solar (AZ) and Abound Solar (CO) — to support exports to India’s solar power plants. First Solar will take a $16 million long-term loan to support exports to Azure Power Rajasthan Pvt. Ltd. in New Delhi; Abound Solar will be given $9.2 million to support exports to Punj Lloyd Solar Power Ltd.

Abound Solar’s Mark Chen, director of marketing, called the Ex-Im Bank financing a culmination of lengthy due diligence and prep work on all sides. India is the top Asian nation for Ex-Im Bank authorizations and exposure. Ex-Im Bank anticipates that India will be its largest single-country market in the world in FY 2012.

First Solar will export thin-film photovoltaic modules to Azure Power for a 5MW solar project in Rajasthan, which will also use equipment from SMA Solar Technology (CA) and General Cable Corp. (KY). The Jayal, Rajasthan plant is one of India’s first utility-scale solar installations. This project, and the Abound Solar project, were developed under the Jawaharlal Nehru National Solar Mission, which has a 20,000MW by 2022 goal. When the Azure solar-power plant is connected to the grid, it will benefit more than 50,000 people and is estimated to reduce carbon emissions of up to 5,500 metric tons per year.

Abound Solar’s exports will also power a 5MW solar project, this one near the village of Bap (about 145 kilometers from Jodhpur in Rajasthan). Atul Punj, chairman of the Punj Lloyd Group, said that the US Ex-Im Bank’s support allows the engineering, procurement and construction company to achieve “financial closure” for the project.

“Selling to India is incredibly different than selling to an established market like Germany,” Chen notes. Contract enforcement is a different culture in India, which is one reason why support from a credible financial entity like the Im-Ex Bank is so crucial to executing a major project. Shipping to Indian installations also takes longer, which companies must consider when targeting certain incentives.

The high temperatures in India tend to favor thin film solar cells over crystalline silicon, points out Abound Solar’s Chen.

Abound Solar focuses on international sales, Chen added: the company sold 90% of its cadmium telluride modules internationally in 2000, primarily to Germany and Italy. In 2011, India has joined their top export customers, and newcomers like Turkey and China are in play.
 
The repayment of Ex-Im’s loans is based on cash flows generated by the sale of electricity to NTPC Vidyut Vyapar Nigam Ltd. (NVVN), a wholly owned power trading subsidiary of India’s National Thermal Power Corp and the agency responsible for the purchase and sale of solar power under the first phase of India’s National Solar Mission. The Indian government has provided special power-price incentives through NVVN.

In fiscal year 2011 to date, Ex-Im Bank has approved financing totaling approximately $75 million for four solar projects in India. The Bank also has about $500 million of India solar projects in the pipeline that will generate an estimated 315MW of solar power.

Ex-Im Bank is the first international financing institution to approve solar-power projects under India’s National Solar Mission and one of the first to approve financings under the solar-power policy of the state of Gujarat.

Ex-Im Bank Chairman Hochberg is conducting a week-long business development mission in India, including participation in the U.S.-India Strategic Dialogue meeting in New Delhi tomorrow, led by US Secretary of State Hillary Rodman Clinton.

Ex-Im Bank is an independent federal agency that fills gaps in private export financing at no cost to American taxpayers. The Bank provides a variety of financing mechanisms, including working capital guarantees, export-credit insurance, and financing to help foreign buyers purchase U.S. goods and services. The Bank has a congressional mandate to increase support for US renewable-energy and other environmentally beneficial exports.
 
India currently ranks first among Asian nations in Ex-Im Bank authorizations and exposure. In fiscal year 2011 through June 30, the Bank has approved $1.4 billion in 173 transactions to support U.S. exports to India, up from a total of $53 million in FY 2010. The fiscal year 2011 financing is supporting an estimated 10,426 U.S. jobs.
 
In fiscal year 2011 through June 30, Ex-Im Bank has approved nearly $22 billion in total authorizations to support $28.1 billion in US export sales. These sales will support approximately 189,700 American jobs in communities across the country. For more information, visit  www.exim.gov

Companies involved:
First Solar Inc. and its wholly owned subsidiaries manufacture and sell solar photovoltaic (PV) modules, and also develop, design, construct, operate and maintain solar PV electricity-generating facilities. For more information, visit www.firstsolar.com.

Azure Power is an independent solar-power producer and the first private-sector company to implement a megawatt-scale, grid-connected solar photovoltaic power plant in India. The company develops solar energy for utility, government and commercial customers. For more information, visit www.azurepower.com.

Abound Solar Inc. manufactures thin-film, cadmium-telluride (CdTe) solar modules in the US for commercial and utility-scale installations. For more information, visit www.abound.com.
 
Punj Lloyd Solar Power Ltd. is owned by Punj Lloyd Infrastructure Ltd., a company that develops infrastructure projects primarily on a public-private partnership basis. The company is a wholly owned subsidiary of Punj Ltd., one of the largest engineering and construction companies in India and part of the Punj Lloyd Group. For more information, visit www.punjlloyd.com.

In related news, Anwell Technologies Limited announced that its wholly owned subsidiary, Sungen International Limited, has won a contract worth approximately $20 million to supply the Group’s in-house produced amorphous silicon (a-Si) thin film solar panel for a solar farm project in India. The thin film panel has been scheduled for delivery in the second half of this year.

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