US govt agency to fund Tata Power with $425 million for TN solar cell and module manufacturing plant

CHENNAI: Tata Power Renewable Energy (TPREL) subsidiary TP Solar on Monday said it is raising up to $425 million (around Rs. 3,500 crore) in financing from the US Development Finance Corporation (DFC) for its upcoming greenfield 4.3 GW solar cell and module manufacturing plant in Tirunelveli district in Tamil Nadu.

The board of directors of the US International Development Finance Corporation has approved the provision of up to $425 million in financing to TP Solar, the company said. TPREL is a subsidiary of Tata Power.

The production of the plant's first module line is expected by the year end, and the first cell production is expected in the first quarter of fiscal year 2024. The equipment required has been ordered and construction work is on, officials told reporters earlier this year.

"Pending a US congressional notification, this investment will support India’s ambitious programme to increase renewable energy manufacturing capability to support domestic solar capacity addition as part of its global green energy transition. DFC’s financial support of Tata Power will help secure the supply chain in the country’s journey for leadership in the clean energy space," TPREL said.

In July last year, Tata Power signed a memorandum of understanding (MoU) with the Tamil Nadu government to invest around Rs 3,000 crore for setting up the said solar module manufacturing plant. The investment in the plant will be made over a period of 16 months and will directly or indirectly create over 2000 employment opportunities with majority of them being women employees, the company then said.

"We appreciate DFC's assistance for our solar cell and module production facility in Tamil Nadu. It shows the trust and belief DFC has in Tata Power’s ability to set up a state-of-the-art manufacturing supply line in the country. This will go a long way in supporting the renewable and clean energy transition in the country.” Praveer Sinha, CEO & MD, Tata Power, said.

India’s policies have been supportive of local manufacturing of photo-voltaic (PV) solar cells and modules as the government has taken steps to both curtail PV imports through safeguard duties and boost manufacturing with its PLI scheme

The Tirunelveli manufacturing plant will bring together advanced technologies to produce high wattage solar modules and cells. Additionally, the facility will also implement Industry 4.0 standards for smart manufacturing. The plant will contribute towards securing India’s commitment to achieve 500GW of clean energy targets by 2030.

DFC partners with the private sector players globally to finance solutions to the critical challenges of the developing world. The financing support comes at a time when global leaders deliberated on energy transition and other sustainability challenges at the recently concluded G20 Summit in New Delhi.

Tata Power is targeting an increase of its clean energy capacity from 38% to 70% by 2030. Currently, Tata Power's renewable portfolio stands at approx. 7.8 GW, with 4.1 GW operational and 3.6 GW under implementation. The company already operates a solar cell and module manufacturing plant of 500 MW capacity in Bengaluru.