Rajasthan: Banks’ refusal to fund hits solar scheme for farmers
Centre’s Kusum scheme aimed at helping farmers with extra income from their barren and semi-fertile land through solar projects is facing hurdles from banks who are reluctant to finance the units.
Out of the 170 farmers who have signed agreements with discoms to set up solar plants, only around 15 have started working on the projects and the rest are delaying it as they are unable to tie-up bank funding.
A senior official at Rajasthan Renewable Energy Corporation Ltd (RRECL) said banks have developed cold feet to finance the projects because of two reasons.
First, he said, there are concerns that discoms don’t have a good track record of paying for the power on time and second, in case of a default, they cannot confiscate the farmer’s land given the sensitivity of the issue.
“Land is a good collateral. But since these are farmers, their land cannot be seized in case of a default. Banks want other collaterals for financing the projects, but farmers don’t have or give other assets. As per the agreement, discoms buy the power, but the track record of their payments to other projects has been very poor. So bankers are wary of these projects,” said the officials.
When TOI contacted a State Level Banking Committee (SLBC) official, he said the boards of the banks have not taken any decision to finance such projects.
