The government may consider an equity fund for promoting renewable energy projects, with major focus on solar energy projects in the country.
"We recognise the need for equity financing to promote solar power projects. If we find there is funding gap, we will recommend a dedicated equity fund to the government," Indian Renewable Energy Development Agency chief executive officer-cum-managing director Debashish Majumdar told PTI.
"Though, solar projects are viable through the current scheme, it will have to be seen how far it is acceptable to banks," he said.
Banks, so far, were not keen in financing solar power projects.
"It may become comfortable for banks financing solar projects through a fund which will reduce the risk perception," Majumdar said.
Currently, the national nodal agency for renewables energy projects does not have any mandate for equity exposure in projects.
It has been capping their activity by financing only debt.
Meanwhile, IREDA signed a memorandum of understanding with National Bank for Agricultural and Rural Development, National Housing Bank and Central Bank of India for refinancing of projects for 200 MW or Rs 20,000 crore (Rs 200 billion) in the first phase.
In 2010-11, it was targeting disbursment of Rs 1200 crore (Rs 12 billion) of which half will go toward wind power projects.
In 2009-10 disbursement was Rs 890 crore (Rs 8.9 billion).
