National Bank for Agriculture and Rural Development (NABARD) has enhanced its support to a Central Government scheme to promote solar power.
To promote commercial marketing of solar accessories, Ministry of New and Renewable Energy (MNRE), had launched the Jawaharlal Nehru National Solar Mission with subsidy for solar lighting and small capacity photovoltaic systems, which would be routed through NABARD.
R. Shankar Narayan, National Bank for Agriculture and Rural Development, Assistant General Manager, told The Hindu here on Wednesday that the subsidy for the component had been increased to 40 per cent from the hitherto 30 per cent.
The NABARD had formulated the modified guidelines in consultation with MNRE and it would be applicable for all applications financed by banks after March 15. As per the guidelines, the units could be located both in urban and rural areas and the models could be home lighting systems or inverter-based systems capable of handling general AC loads. Beneficiaries were eligible for capital subsidy of 40 per cent.
Loan to manufacturers
The loan would be released directly to manufacturers, who have been approved by the Union Ministry. They have to provide Compact Fluorescent lamps (CFLs) of 9 W/11 W and LED (Light Emitting Diode) for home lighting systems as per specifications and modules prescribed by MNRE.
Of the total project cost, he said that 50 per cent would be covered by the bank loan with enhanced subsidy of 40 per cent and 10 per cent is the beneficiaries’ contribution as per Reserve Bank of India (RBI) norms.
The banks have also been instructed not to charge interest for the subsidy component.
The loans extended by the banks will have a repayment period not exceeding 5 years. The loan repayment period would have a minimum lock in period of 3 years.
He informed that 100 per cent refinance would be provided by NABARD to the implementing banks for the bank loan portion.
All commercial banks and Regional Rural Banks were eligible to cover the financing done on or after 15 March for projects approved by MNRE.
Mr. Shankar Narayan said that effective implementation of the scheme through banks was likely to give a further boost for solar systems in the country. Tamil Nadu Energy Development Agency (TEDA) office located in Madurai could be contacted for further details.