The US International Development Finance Corporation (DFC) on Tuesday said it had approved up to $500 million of debt financing for First Solar, the largest American solar manufacturing company. The loan represents the largest single debt financing transaction for DFC and will support the company’s previously announced vertically integrated photovoltaic (PV) solar module manufacturing facility in Tamil Nadu.

The facility has a projected annual capacity of 3.3 gigawatts (GW), the development bank said in a statement. “DFC is thrilled to be in a position to support First Solar’s new venture in India, which will boost solar panel manufacturing capacity for a key ally and help mobilize the industry to take up better standards that align with U.S. values,” said Dev Jagadesan, DFC’s acting CEO. “This transaction represents another milestone in the United States effort to drive alternative supply chains – and to articulate a vision for climate finance that drives our development mission.

”First Solar produces “thin film” solar panel modules, which do not use polysilicon.The company announced its intent to build the India facility in July, shortly after it unveiled plans for a new $680 million factory in Ohio that will add 3.3GW of new domestic manufacturing capacity in the United States by 2023, while creating over 700 new manufacturing jobs.

The company expects to reach 16GW of global manufacturing capacity in 2024.“Like the United States, India has recognized that it must shape its own sustainable energy future and has sought to supercharge the expansion of its domestic solar manufacturing capacity,” said Mark Widmar, CEO, First Solar. “DFC’s intent to support this facility has the potential to create a high-visibility, repeatable blueprint for enabling the clean energy ambitions of like-minded nations through American innovation, ingenuity, and competitiveness.”Most of the new facility’s production is expected to sell into the quickly growing solar market in India, a Quad ally and key partner to the US in the Indo-Pacific region.

The bank said that DFC’s proposed financing promotes the US commitment to tackle climate change at home and abroad and supports India’s ambitious renewable energy goals. Prime Minister Narendra Modi has launched a comprehensive effort to install 500GW of renewable power generation in India, which “will help save lives by reducing pollution in major cities and contributing to the response to the climate crisis,” the company said.