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India to Cancel Solar Permits of Companies That Don’t Get Loans by July 9

India will cancel licenses for solar projects awarded to companies under its first auction if they don’t obtain loans to build their plants by July 9, an official said today.

“That’s it. They’ll be over,” Deepak Gupta, secretary at the Ministry of New and Renewable Energy, said in an interview in New Delhi today when asked what would happen to projects that don’t meet the deadline.

Rather than fining companies for delays, their project licenses will be revoked, he said.

India awarded permits to companies, including Lanco Infratech Ltd. (LANCI) and Reliance Power Ltd. (RPWR), in December to build the first 620 megawatts of solar plants in a national program that calls for 20,000 megawatts by 2022.

Companies were given six months from the date of signing power purchase agreements to line up financing for their projects. Commercial banks have been reluctant to lend to the new industry on concerns the technology may not perform as expected and that projects may not get paid for the power they generate by financially troubled state electricity distribution companies.

India currently has less than 18 megawatts of grid- connected solar power, according to the Ministry of New and Renewable Energy.

To contact the reporter on this story: Natalie Obiko Pearson in Mumbai at npearson7@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net.

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