A US development agency has announced USD 500 million of debt financing for the largest American solar manufacturing company to support the company’s previously announced solar manufacturing facility in Tamil Nadu, India. US International Development Finance Corporation, better known as DFC, is lending USD 500 million to build a solar-panel factory in India, in a bid to counter China’s dominance of the solar industry’s supply chain, the Wall Street Journal (WSJ) reported. The WSJ report said that this deal checks off several priorities for DFC.
According to the report, the US has directed it to focus on addressing climate change and deepening ties with India. Earlier in 2019, Congress overhauled the DFC from a predecessor agency, ordering it to counter authoritarian governments in addition to promoting growth in developing countries, it added.
“DFC (Development Finance Corporation) is thrilled to be in a position to support First Solar’s new venture in India, which will boost solar panel manufacturing capacity for a key ally and help mobilize the industry to take up better standards that align with U.S. values,” said Dev Jagadesan, DFC’s Acting Chief Executive Officer.
Mark Widmar, Chief Executive Officer, First Solar said India has recognized that it must shape its own sustainable energy future and has sought to supercharge the expansion of its domestic solar manufacturing capacity.
“DFC’s intent to support this facility has the potential to create a high-visibility, repeatable blueprint for enabling the clean energy ambitions of like-minded nations through American innovation, ingenuity, and competitiveness.” In a press release issued on Tuesday, DFC said that this investment will promote DFC’s commitment to diversifying supply chains.
China currently controls the production of solar panels, accounting for the majority of global production by some estimates. This dominance is troubling countries such as the U.S. and India that are trying to increase the use of solar energy, according to WSJ.
“First Solar produces ‘thin film’ solar panel modules, which do not use polysilicon. First Solar, which was the first of the world’s ten largest solar manufacturers to join the Responsible Business Alliance, will replicate its industry-leading transparency and traceability protocols in India, amplifying efforts to boost supply chain transparency throughout the renewable energy sector,” the release said. Optimized for the country’s unique operating environment, most of the new facility’s production is expected to sell into the quickly growing solar market in India, a Quad ally and key partner to the U.S. in the Indo-Pacific region.
DFC’s proposed financing promotes the U.S. commitment to tackle climate change at home and abroad and supports the Government of India’s ambitious renewable energy goals, the release said. “Prime Minister Modi has launched a comprehensive effort to install 500GW of renewable power generation in India, which will help save lives by reducing pollution in major cities and contributing to the response to the climate crisis,” it added.