Ministry of New & Renewable Energy To Follow Up With RBI For Removal Of Priority Sector Lending Limit For Sector

The Ministry of New & Renewable Energy (MNRE) is set to follow up with RBI for removal of the priority sector lending limit for RE sector. This will encourage the PSBs to lend more for RE projects and help RE developers' access easy finance, according to a government press release. RK Singh, Union Minister of State (IC) for Power and New & Renewable Energy held a meeting to review various issues pertaining to the Renewable Energy (RE) sector yesterday. The meeting was attended by various stakeholders including the Secretary, MNRE, senior officials from MNRE, Department of Economic Affairs, Dept. of Expenditure, Dept. of Financial Services, Dept. of Revenue and representatives of Public/Privatebanks and Financial Institutions.

In the meeting Singh asked the Banks/Financial Institutes to categorize RE as separate sector different from power sector so that funds would flow to RE projects. He further said that current tariff rates discovered for various RE projects are viable as the maintenance/running cost of RE projects is very less in long run. He also added that 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. The Minister also requested banks to come forward to lend to RE sector.

On the issue of delays in land acquisition for RE projects, the Minister said that SECI will be tying up with State Governments for the land. As the land will be on lease, therefore 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.

Discussions were held about the GST issues on RE equipments/ components and Dept. of Revenue was requested to place appropriate proposal before the GST council. The issue of inverted duty structure also came up for discussion during the meeting. The Minister said that every measure need to be taken to promote manufacturing in RE sector in the country, including corrections of duty structure and approval of a scheme to provide capital subsidy. Discussions were also held on starting a pilot project to promote solar cooking in the households.

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