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MNRE tells lenders to favour BIS-compliant solar projects
The ministry of new and renewable energy (MNRE) has asked lending institutions to give preference to Indian standards to ensure quality while financing solar power projects, having noted that the current procedure favours Chinese suppliers at the cost of Indian players.
In a recent communication to the finance ministry, MNRE said lenders should prefer manufacturers complying with standards laid down by the Bureau of Indian Standards (BIS) while financing solar projects, instead of following the Bloomberg Tier-I list, which mostly includes foreign players, or large Indian manufacturers such as Tatas and Adani Solar.
“Even Chinese companies can have BIS certification. We are saying, don’t give preferential treatment to Chinese by following Bloomberg Tier-I list, which mostly has foreign players and only a couple of Indian players,” an official told ET on condition of anonymity.
Last year, MNRE made it mandatory for manufacturers or sellers of PV modules in India to obtain BIS registration. Following several extensions, the order will be effective January 1, 2019, the official quoted above said. Prior to implementation of BIS certification as a compulsory requirement, there was no uniform means to ascertain quality of modules supplied in India, the ministry noted.
“The fact that supply is from a tier-I company does not ensure quality of the module. It only ensures that the module manufacturer is recognised as a tier-I manufacturer by Bloomberg based on its financial strength,” the letter to the finance ministry said.
Such a condition automatically leads to a preference being given to foreign, including Chinese, manufacturers at the cost of Indian ones, the letter added.
Industry experts say that while tier-I certification looks at bankability of solar projects, the BIS certification focuses on the compliance to norms related to raw material used in developing solar modules.
“It would be an ideal combination for a manufacturer to possess both certifications as they add credibility and help build the market in India and globally, as well as boost stakeholder confidence. To assure attractive returns for our investors, it is advisable to consider both certifications in tandem,” said Sunil Rathi, director at Waaree Energies, which has also been recognised with tier-I certification.
“The tier-I list is a more holistic approach; more suited to lenders as a guidance to tell them what has been acceptable to different lenders in the past. MNRE is insisting on use of BIS standards, which is more like technical specification. For lenders, that alone is not sufficient,” said Vinay Rustagi, managing director at renewable energy consultancy Bridge to India.
Rustagi said lenders are more likely to continue relying on multiple approaches and not BIS certification alone to ascertain quality parameters in any project.