Move will encourage lenders to lend more, help developers access easy to finance.

The Ministry of New and Renewable Energy will ask the Reserve Bank of India to remove the priority sector lending limit for the renewable energy sector.

A decision to this effect was taken during a review meeting held by Minister of State (Independent Charge) for Power and New and Renewable Energy, RK Singh, here on Monday.

This will encourage the public sector banks to lend more for renewable energy (RE) projects and help developers access easy finance, an official statement said. Singh also requested banks to come forward to lend to the RE sector.

Singh said the current tariff rates discovered for various RE projects are viable as the maintenance and running cost of RE projects is very less in the long run. With time, the cost of RE technology is coming down whereas the efficiency of RE equipments is improving day by day. So the low tariffs are not an aberration, he added. On the issue of delay in land acquisition for RE projects, Singh said the Solar Energy Corporation of India (SECI) will tie up with State governments for the land. “As the land will be on lease, there won’t be any upfront payment for the land. It will also tie up transmission while floating bids. Banks/financial institutions were asked to tie up with SECI for offering predetermined loans to successful bidders,” the statement said.

There were discussions about the GST issues on RE equipments/components. “The Department of Revenue, Ministry of Finance was requested to place the appropriate proposal before the GST Council. The issue of inverted duty structure also came up for discussion during the meeting,” the statement said.

Discussions were also held on starting a pilot project to promote solar cooking in the households.