NTPC Renewables Tenders BoS Package for 200 MW Solar Project in Rajasthan

POWERGRID Wins PFC Consulting’s ISTS Tender to Evacuate 2.7 GW of Renewables

MNRE Floats Consultancy Tender for National Renewable Energy Portal Operations

Inox Clean Acquires Macquarie-Owned Vibrant Energy for ₹50 Billion

Himachal Pradesh Sets Levelized Tariffs for Distributed Solar Projects

CEA Notifies Rules on Safety Framework for Battery Energy Storage Systems

Bihar Expands Time-of-Day Tariffs Applicability in FY 2027

NTPC to Invest ₹58 Billion in 4.7 GWh Battery Energy Storage System

Montecarlo Wins PFC Consulting’s Auction to Evacuate 7 GW Solar Power

SECI Invites Bids for Short-Term Supply of 80 MW Firm Power Under Open Access

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					</table>India’s micro, small, and medium enterprises (MSMEs) are increasingly turning to clean energy solutions such as rooftop solar, but access to finance remains a decisive factor shaping adoption.
Bankers highlighted that while lending frameworks for such projects are evolving, borrowers must navigate interest-rate volatility, documentation requirements, and realistic project expectations to secure funding.
Lenders also emphasize that access to capital is improving, though loan approvals still depend on creditworthiness, cash flow stability, and careful project planning rather than on technology alone.
Lending Structure and Credit Assessment
Banks currently do not offer a standardized “green loan” category for MSMEs; instead, they route renewable energy projects through existing SME lending frameworks. Interest rates vary based on internal assessments, borrower profiles, and financial history.
Amit Kanhai, Assistant General Manager (AGM) at <a href="https://bankofindia.bank.in/" target="_blank" rel="noopener">Bank of India</a>, explained that rates are linked to internal and external credit ratings and typically range from 8.6% to 8.9% for most borrowers, with slight variations based on risk.
External credit ratings are not mandatory for most MSMEs unless exposure exceeds ₹500 million (~$5.28 million), allowing smaller enterprises to rely on internal evaluations based on experience, financials, and repayment capacity.
Similarly, <a href="https://www.idbi.bank.in/" target="_blank" rel="noopener">IDBI Bank</a> follows a risk-based approach. Deputy General Manager Abhishek Mishra noted that interest rates are not fixed and depend on “credibility, banking behavior, and credit scores,” generally starting at around 8.9% and rising with risk.
Collateral-free lending is widely available at both institutions, reducing barriers to entry for MSMEs exploring rooftop solar or other clean energy options.
Timelines, Documentation, and Role of EPCs
Loan processing timelines are relatively short when proposals are well-structured. Lenders indicate that approvals can be completed within 10 to 20 days, provided the documentation is complete and the project details are credible.
A key factor influencing approval is the engineering, procurement, and construction (EPC) partner. Banks rely heavily on the quality of project reports and cost estimates submitted by these vendors. Mishra emphasized that borrowers should prioritize efficiency over low pricing, as unrealistic or aggressive quotations often lead to delays or closer scrutiny.
Cash flow analysis remains central to decision-making. Banks primarily assess whether existing business revenues can support loan repayment over time, making conservative projections essential for faster approvals.
Borrower Risks
Both lenders flagged over-optimism as the most common mistake among MSMEs intending to adopt clean energy. Borrowers often overestimate savings or system performance without factoring in long-term variability.
Mishra felt that while lenders may appear conservative, this caution protects borrowers from financial stress, particularly over the project&#8217;s lifecycle. Kanhai added that overestimating capacity or returns can weaken repayment ability, making realistic planning critical.
Another frequent issue is poor partner selection. Enterprises often prioritize lower-cost vendors without assessing long-term reliability, even though system performance directly affects financial outcomes.
Financial Gains and Future Outlook
Despite these challenges, lenders pointed to clear financial benefits for adopters. Many MSMEs have significantly reduced electricity expenses, improving operating margins and competitiveness in tight markets.
Government-backed programs are further strengthening the financing ecosystem. Under the agriculture infrastructure fund, eligible enterprises can access loans of up to ₹20 million (~$211,185) at capped interest rates, with effective rates dropping to nearly 6% after subsidies. These loans are also largely collateral-free, supported by government guarantees.
Demand for renewable energy financing has risen steadily over the past few years, with lenders observing a clear shift in business behavior. As Mishra noted, the transition is established, with adoption now driven by both cost savings and competitive pressure.
The discussions at Mercom India’s Bhopal C&amp;I Clean Energy Meet focused on financing challenges for MSMEs, where lenders outlined the evolving landscape of clean energy funding and the growing readiness of businesses to invest in it.
The next Mercom India C&amp;I Clean Energy Meet event will be held in <a href="https://www.mercomindia.com/event/c-and-i-clean-energy-meet-2026-mumbai" target="_blank" rel="noopener">Mumbai</a> on April 16, 2025.
<a href="mailto:sales@mercomindia.com?subject=Seeking%20Solar%20Installation%20Guidance%20and%20Vendor%20Recommendations%20for%20Business" target="_blank" rel="noopener">Contact us</a> if you plan to install solar and need guidance or vendor recommendations.

MSMEs Eye Clean Energy, But Here’s What Bankers Say

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					</table>India’s clean energy transition is gaining momentum, driven by growing policy support and rising pressure on commercial and industrial (C&amp;I) consumers to reduce electricity costs and reliance on grid supply. In this environment, rooftop and captive solar systems are increasingly being viewed as viable alternatives for meeting energy needs.
However, financing remains a critical determinant of solar adoption, particularly for residential and C&amp;I projects. Recognizing this, public and private sector banks, along with non-banking financial institutions, are stepping up efforts to support the transition through expanded green financing initiatives. These institutions are rolling out tailored financial products for residential customers, micro, small, and medium enterprises (MSMEs), large corporates, EPC service providers, and the domestic solar manufacturing ecosystem.
Financing options
Consumers planning to install solar projects can access a range of financing products from banks and other lending institutions. These include structured funding options, from MSME-focused bank loans to lease-based arrangements and turnkey financing solutions, enabling different customer segments to adopt solar with lower upfront costs.
Priyanka Gaikwad, Deputy General Manager at Small Industries Development Bank of India (<a href="https://www.sidbi.in/en/" target="_blank" rel="noopener">SIDBI</a>), a principal institution for promoting, financing, and developing the MSME sector in India, said the institution offers multiple green financing options. There are three noteworthy sustainable financing variants tailored to the type of investment and the customer category.
The first is the Electronics and Green Products Scheme (eGPS), which encourages MSMEs to adopt responsible sourcing and reduce carbon footprints. Under this program, loans up to ₹50 million (~$558,126) are available. The online loan applications are fully automated to analyze and evaluate applications and generate in-principal approval within an hour.
The End-to-End Energy Efficiency (4E) financing caters to mid-sized projects and provides loans of up to ₹150 million (~$1.67 million), subject to a maximum promoter contribution of 75% of the project cost. MSMEs can access loans to implement energy conservation measures, upgrade technology, and invest in rooftop solar.
The eGPS and 4E programs apply to existing entities of at least three years and satisfactory financials.
Projects that do not qualify under these variants are covered under the green financing program. This program covers greenfield and major expansion projects with project costs exceeding ₹150 million (~$1.67 million).
Recently, SIDBI <a href="https://www.mercomindia.com/gcf-approves-215-6-million-for-sidbi" target="_blank" rel="noopener">contracted</a> a $200 million line of credit under the Green Climate Fund’s Financing Mitigation and Adaptation Projects (FMAP) program. This includes concessional financing options for solar projects up to 10 MW and wind projects up to 5 MW.
Kuldeep Kishore, AGM at the <a href="https://bankofindia.bank.in/" target="_blank" rel="noopener">Bank of India,</a> stated that the bank offers loans under three programs.
The first is the Energy Saver program, aimed at industries looking to reduce electricity costs by adopting green energy solutions, particularly solar installations. Under the program, the bank provides loans at lower-than-average margins for manufacturing and service units, with borrower margins starting as low as 10% and competitive interest rates.
Under the Energy Saver vendor finance program, Bank of India provides channel financing through approved cash credit facilities, financing stocks, and book debts. This financing can be used to purchase solar panels from the original equipment manufacturers.
The third program covers project finance for Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM KUSUM) Component-C. At the district level, the bank can approve ₹350 million (~$3.9 million), rising to ₹700 million (~$7.81 million) without prior approval (from the head office or central office).
“We have remained cautious, as well as neutral, in terms of the project being feasible and profitable,” said Kishore.
Lending Criteria
Banks and financial institutions rely significantly on lending criteria to assess the risks and mitigate them while determining a borrower’s loan repayment ability.
Institutions such as SIDBI analyze parameters such as energy savings and greenhouse gas emissions reductions when considering loan proposals. They also undertake environmental and social due diligence.
Lenders consider credit ratings when making informed decisions and managing their risk exposure. Credit ratings act as an independent, third-party assessment of a borrower&#8217;s creditworthiness and their likelihood of default.
About the relevance of credit ratings while considering loan proposals, Gaikwad said, “The RBI mandates that each and every proposal must be rated. Pricing (interest rates) is based on the credit rating. So ultimately, your pricing, eligibility, and all other criteria are dependent on these ratings.”
She added that applicants must provide their basic details, following which, SIDBI will determine which programs their projects fall under and the applicable incentives and credit ratings. This will be decided at the branch level.
The system for ascertaining loan eligibility has become more rigid than before because applications are now online. This leaves little room for discretion while approving the applications. Gaikwad advises financial discipline for better chances at loan approvals.
“Many times, we use credit and risk assessment tools, such as CIBIL, CMR, FIT Rank, and even Jocata SWARA scores, which directly capture information from the available public data. Financial discipline will help maintain good scores,” she said.
Bank of India considers each project’s financials and its cost-benefit analysis before approving loans.
According to Kishore, it is easier to project costs, profits, and incomes, as well as variables, in the solar sector. Financial modeling uncertainty is very low in this sector.
Applicants who maintain good financial conduct over the initial three to five years build considerable trust. This will lead banks, specifically public sector undertakings, to provide greater support to borrowers even in tough or experimental periods.
Applicants should also keep their financial projections as certain as possible while discussing their applications with the banks.
Interest Rates
Lenders are also offering attractive interest rates to help drive solar installations. Low interest rates will help reduce borrowing costs and cut monthly payments. This will free up the borrower’s cash flow for their investment or operational needs.
Government organisations such as the MSME Ministry offer incentives under the Green Investment and Financing for Transformation to help smaller businesses. The program, specifically applicable to micro or small enterprises, provides an interest subvention of 2% to projects costing up to ₹20 million (~$223,250.40).
Gaikwad said SIDBI has been providing concessional financing for some time. The institution usually provides concessions of up to 25 basis points compared to normal project sizes. Additionally, any proposals that qualify under the FMAP program can receive concessions.
Bank of India’s interest rates can go as low as the repo-based lending rate of approximately 8.5%. The remaining rates depend on the credit rating models, the type of financing chosen, the type of activity or projects the applicants are involved in, and the project’s longevity, among other factors.
“If you are in business for the past three to five years with a good or excellent credit rating, you could go as low as 8% (interest rate), and if you are a new entrant, it could go as high as somewhere between 10% and 11%,” said Kishore.
Benefits of Competition and Incentive Awareness
With the growing transition to renewable energy solutions in India, many companies have entered the fray to offer a range of solutions.
Kishore noted that increasing competition helps clean technology become more refined. It is easier to understand and to grow.
“It is an avenue with less uncertainty and more promise,” he said.
Despite the rising adoption of solar energy and other clean energy systems in India, awareness regarding their benefits remains fairly low within the country.
Gaikwad observed a similar lack of awareness of available incentives and subsidies. She advises customers to contact their bankers and institutions, such as SIDBI, for more information about these initiatives.
The industry discussion at Mercom’s recent <a href="https://www.mercomindia.com/event/c-and-i-clean-energy-meet-2025-nagpur" target="_blank" rel="noopener">C&amp;I Clean Energy Meet</a> in Nagpur highlighted the diverse options available for solar and other clean energy projects. Clean energy financing is evolving alongside India’s energy landscape, making it easier to finance renewable energy projects.
While discussing financing options, speakers underscored the importance of creditworthiness and financial discipline in securing loans for clean energy projects. They also emphasized the need to raise awareness of loan options and encouraged potential customers to connect with banks and other lending institutions for more information.
The next Mercom India C&amp;I Clean Energy Meet event will be held in <a href="https://www.mercomindia.com/event/c-and-i-clean-energy-meet-2026-nashik" target="_blank" rel="noopener">Nashik </a>on January 9, 2026.
<a href="mailto:sales@mercomindia.com?subject=Seeking%20Solar%20Installation%20Guidance%20and%20Vendor%20Recommendations%20for%20Business" target="_blank" rel="noopener">Contact us</a> if you plan to install solar and need guidance or vendor recommendations.

How Banks and NBFCs Are Reshaping Solar Financing for Homes, MSMEs, and Industry

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					</table><a href="https://recindia.nic.in/" target="_blank" rel="noopener">REC Limited</a>, a public infrastructure finance company, has raised $1.25 billion in August and September 2023 from a consortium of six banks and through a Foreign Currency Term Loan Agreement.
The company raised $1.15 billion in two tranches from a consortium of six banks. The financing proceeds are expected to go towards funding power, infrastructure, and logistics sector projects as permitted under the External Commercial Borrowings guidelines of the Reserve Bank of India.
The participating banks raised the loans as Mandated Lead Arrangers and Bookrunners.
Tranche 1 of the financing comprised $505 million raised on August 3, 2023, from <a href="https://www.bankofbaroda.in/" target="_blank" rel="noopener">Bank of Baroda</a>, Gujarat International Fin Tec-City International Financial Services Centre Banking Unit (<a href="https://www.giftgujarat.in/business/ifsc" target="_blank" rel="noopener">GIFT City IBU</a>), <a href="https://www.axisbank.com/" target="_blank" rel="noopener">Axis Bank</a>, and <a href="https://sbiuk.statebank/" target="_blank" rel="noopener">State Bank of India</a>’s London Branch.
Tranche 2 comprised $645 million raised on August 31, 2023, from State Bank of India’s London Branch, <a href="https://bankofindia.uk.com/" target="_blank" rel="noopener">Bank of India</a>’s London Branch, GIFT City IBU, and <a href="https://www.hsbc.co.in/" target="_blank" rel="noopener">HSBC</a>.
The tranches together involved an aggregate commitment of $550 million from GIFT City IBUs, which the company claimed to be the highest-ever commitment from GIFT City IBUs in a single month. GIFT City IBUs had previously committed $345 million back in December 2021.
The company also announced that it has signed a $100 million Foreign Currency Term Loan Agreement with the Export Import Bank of India (<a href="https://www.eximbankindia.in/" target="_blank" rel="noopener">Exim Bank</a>).
The proceeds of this loan will be used towards refinance for on-lending to the company’s borrowers in the power infrastructure and logistics sector for importing capital equipment.
Vivek Kumar Dewangan, Chairman and Managing Director, REC Limited, said, “REC has been actively looking for various innovative options to diversify its sources of borrowings to lower its cost of borrowings. We are pleased with the overwhelming response of Banks to these loans, which is also our largest single-month fundraising from GIFT City IBUs. We are delighted to partner with Exim Bank of India to bridge the financing needs of the power, infrastructure, and logistics sector and sign the loan agreement for $100 Million, which is the first one amongst us.”
The loans come with a five-year tenor and are benchmarked to Secured Overnight Financing Rate, a benchmark rate for loans denominated in U.S. dollars.
The funds were raised under REC’s Market Borrowing Program for 2023-24, worth ₹1.2 trillion (~$14.43 billion).
The government-owned power sector lender recently <a href="https://www.mercomindia.com/recs-profit-up-21-yoy-q1-fy-2024" target="_blank" rel="noopener">posted</a> its highest-ever profit in the first quarter of any financial year. The company&#8217;s net profit during the first quarter of the financial year 2024 was ₹29.61 billion (~$356.16 million), a 21% year-over-year jump from ₹24.47 billion (~$294.34 million).
In May this year, REC <a href="https://www.mercomindia.com/rec-lists-750-million-at-ifsc-stock-exchanges" target="_blank" rel="noopener">listed</a> its recently issued green bonds, which raised $750 million under its global medium-term program of $7 billion, at the GIFT IFSC Stock Exchanges in Gandhinagar.

REC Raises $1.25 Billion to Finance Power Infrastructure & Logistics Projects

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					</table>Here are some noteworthy cleantech announcements of the day from around the world:
Indian Renewable Energy Development Agency (IREDA) <a href="https://www.ireda.in/images/pressrelease/MoU-with-Bank-of-India.pdf" target="_blank" rel="noopener">signed</a> a memorandum of understanding (MoU) with the Bank of India (BoI) for co-lending, co-origination, and loan syndication for renewable energy projects. The MoU is expected to empower IREDA and BoI to co-lend and co-originate for renewable energy projects, including small hydro and ethanol projects. Both organizations will strive to fix interest rates for IREDA borrowings for three to four years.
TP Renewable Microgrid (TPRMG), a wholly owned subsidiary of Tata Power and Small Industries Development Bank of India (SIDBI), have <a href="https://www.tatapower.com/media/PressReleaseDetails/1970/tp-renewable-microgrid-and-sidbi-collaborate-to-set-up-1000-green-energy-enterprises-nationwide-to-support-rural-entrepreneurs" target="_blank" rel="noopener">partnered</a> to launch an innovative program that would see 1,000 green energy enterprises established throughout the nation. Under the collaboration, SIDBI will provide entrepreneurs a &#8220;Go Responsive, Enterprise incentive (GREENi)&#8221; after they complete a TPRMG-organized capacity-building activity. Through its PRAYAAS program or partner institutions, SIDBI will also assist in credit linkages to facilitate financing for setting up or expanding the businesses of rural entrepreneurs. To provide these rural businesses with quality, affordable, dependable, and clean green energy (Solar/Wind/Biogas), TPRMG will discover suitable entrepreneurs within its existing microgrid network and in new geographies. TPRMG will also provide rural enterprises, green energy solutions, and the technical know-how for maximizing energy utilization and conservation.
IREDA <a href="https://www.ireda.in/images/pressrelease/MoU-with-MAHAPREIT.pdf" target="_blank" rel="noopener">signs</a> an MoU with Mahatma Phule Renewable Energy and Infrastructure Technology (MAHAPREIT), a wholly owned subsidiary of Mahatma Phule Backward Class Development Corporation. Per the MoU, IREDA would offer financing facilities to MAHAPREIT for the Renewable Energy projects to be implemented for state utilities, local bodies, and the infrastructure of Renewable Energy Parks. Under this collaboration, IREDA will also undertake techno-financial due diligence on renewable energy and energy efficiency &amp; conservation projects for MAHAPREIT.
The Haryana Electricity Regulatory Commission (<a href="https://herc.gov.in/" target="_blank" rel="noopener">HERC</a>), in a recent ruling, directed Energy Efficiency Services Limited (<a href="https://eeslindia.org/en/home/" target="_blank" rel="noopener">EESL</a>) and the Haryana DISCOMs to ensure the installation of smart meters 5% above its August 2022 target to make up for the deficit in July 2022. The Commission said it would be obliged to initiate action under the relevant provisions of Acts or Regulations if the target is not met.  The Commission also directed the state DISCOMs to submit a report 15 days after installing the meters on defective meters, and the rectification measures are taken by EESL. The DISCOMs were also directed to submit an affidavit within 15 days, outlining various steps involved to achieve the target fixed by the Ministry of Power, keeping in view the fact that no changes in the system for facilitating consumers to apply new connection on prepayment mode have been made till date despite directions of the Commission.

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