SIDBI’s Rooftop Solar Financing Scheme: Promoting Solar Adoption among MSMEs in India
The small industries development bank of India (SIDBI) has been a major player in promoting the growth of the micro, small, and medium enterprises (MSME) sector in India. In recent years, SIDBI has also been involved in promoting the adoption of rooftop solar among MSMEs, providing easy and affordable financing schemes for customers in the rooftop solar segment.
SIDBI’s financing scheme for rooftop solar projects provides financial assistance of up to INR 250 lakhs at an interest rate of 9.1-10.2% for a tenure of up to five years. The loan can cover up to 100% of the project cost, provided that the plant capacity is between 25kW to 500kW, and the power output is lower than the current consumption from the grid. Additionally, the collateral/margin required is 15% to 25% of the financial assistance required as a fixed deposit (FD).
As an organization with a deep understanding of MSME behavior, SIDBI’s financing scheme can be pivotal in scaling rooftop solar adoption in this particular segment. The scheme provides a significant opportunity for MSMEs to switch to rooftop solar without worrying about the high upfront costs and financing challenges associated with solar projects.
In January 2021, Tata Power announced its partnership with SIDBI to offer easy and affordable financing for MSME customers in the rooftop solar segment. The partnership aims to provide a unique solar financing solution for MSME customers, helping them switch to rooftop solar without any collateral at an interest rate of less than 10%, with a turnaround time of seven days and disbursement in four days. The loan is available exclusively for Tata Power customers for both on- and off-grid applications.
SIDBI’s financing scheme for rooftop solar projects, along with its partnership with Tata Power, demonstrates its commitment to promoting the adoption of renewable energy in the MSME segment. With the continued support of organizations like SIDBI, MSMEs in India can play a significant role in driving the transition towards a more sustainable energy future.
SIDBI’s financing scheme for rooftop solar projects provides a unique opportunity for MSMEs to switch to renewable energy without worrying about financing challenges. The partnership with Tata Power further strengthens its commitment to promoting renewable energy adoption in the MSME segment. As the adoption of rooftop solar continues to grow, initiatives like these will play a crucial role in achieving India’s ambitious renewable energy targets.
Financing termsheet of SIDBI
| Term Sheet | |
|---|---|
| Facility | Rooftop Solar Financing Scheme |
| Lender | Small Industries Development Bank of India (SIDBI) |
| Borrower | [Insert borrower name and address] |
| Purpose | To finance the installation of rooftop solar panels for power generation |
| Facility Amount | Up to INR 250 lakhs |
| Interest Rate | 9.1-10.2% per annum |
| Tenure | Up to 5 years |
| Repayment Schedule | Quarterly/ Half Yearly/ Annual |
| Security | 15-25% of financial assistance required as Fixed Deposit (FD) |
| Other Terms | |
| Plant Capacity | 25kW to 500kW |
| Power Output | Lower than the current consumption from the grid |
| Coverage | Up to 100% of the project cost |
| Collateral/Margin | 15-25% of financial assistance required as a fixed deposit (FD) |
| Insurance | The borrower must maintain proper insurance for the solar panels throughout the tenure of the facility |
| Regulatory Requirements | The borrower must adhere to all regulatory and statutory requirements related to rooftop solar projects |
| Utilization | The borrower must use the facility only for the purpose of financing rooftop solar projects |
| Credit Approval Process | The facility is subject to SIDBI’s credit approval process |