The US International Development Finance Corporation’s (DFC) board has approved up to $425 million in financing in TP Solar for its upcoming greenfield 4.3 gigawatts (GW) solar cell and module manufacturing plant at Tirunelveli (Tamil Nadu).

TP Solar is a subsidiary of Tata Power Renewable Energy (TPREL) which, in turn, is a Tata Power subsidiary. DFC is a US-based development finance institution, Tata Power said on Monday.

The plant’s first module production is expected by the year-end and the first cell production is expected in the first quarter of FY24, Tata Power said on Monday.

“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,” it added.

In July 2022, Tata Power signed a MoU with the Tamil Nadu government in which it put the proposed investment in the project at ₹3,000 crore. However, Praveer Sinha, CEO and Managing Director, Tata Power, told businessline today, that the project cost has been revised to ₹4,500 crore, consequent upon the increase in the proposed capacity from 4 GW to 4.3 GW.

This is the second time that the US International Development Finance Corporation is giving funding for a solar plant in India. In December 2021, First Solar had secured a $500m funding from the DFC, for is 3.3 GW plant coming up at Sriperumbudur, near Chennai. The plant has just commenced production.

DFC partners with private sector players across the globe to finance solutions to the most critical challenges facing the developing world today. The financing support comes at a time when global leaders are deliberating on energy transition and other critical sustainability challenges at the recently concluded G20 Summit being held in New Delhi.

This financing support will contribute towards securing India’s commitment to achieve 500 GW of clean energy targets by 2030.

“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 modern manufacturing supply line in the country. This will go a long way in supporting the renewable and clean energy transition in the country,” Tata Power MD & CEO, Praveer Sinha, said.

The Tirunelveli manufacturing plant will integrate advanced technologies, enabling the production of high wattage solar modules and cells with industry-leading efficiencies. Additionally, the facility will implement industry 4.0 standards for smart manufacturing.

The plant is expected to create over 2,000 employment opportunities directly or indirectly, with the majority of employees being women employees from the local areas.

Tata Power is committed to expanding its clean and green energy capacity, targeting an increase from 38 per cent to 70 per cent by 2030. The company is actively focusing on renewable capacity expansion and transitioning into consumer-oriented business.

Currently, Tata Power’s renewable portfolio stands at around 7.8 GW, with 4.1 GW operational and 3.6 GW under implementation. The company also operaties a solar cell and module manufacturing plant of 500 MW capacity, each at Bengaluru.

Tata Power shares up

Following the announcement of DFC’s $425-million (Rs 3,143.25 crore) financing for TP Solar Ltd, Tata Power Co shares surged 1.17 per cent on the BSE at 2.28 pm.

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