US Ex-Im is providing long-term loans worth US$25mn in support of US solar energy exports to India.

The bank will issue a US$16mn loan to support a solar project in Jayal, Rajasthan, and a US$9.2mn loan for the construction of a solar power project near Jodhpur.

The Rajasthan solar project will involve exports of thin-film photovoltaic modules from US firm First Solar to Azure Power in New Delhi for the construction of a 5MW project. Additional US suppliers include SMA Solar Technology and General Cable.

The 16.5-year loan will be repaid by the cash flows generated by the sale of electricity to NTPC Vidyut Vyapar Nigam (NVVN) − a wholly-owned power trading subsidiary of India’s National Thermal Power.

The Indian government has also provided special power price incentives through NVVN.

The Azure solar power plant in Jayal is one of the first utility-scale solar power plants in India under the Jawaharlal Nehru National Solar Mission, which aims to develop over 20,000MW of installed solar power by 2022.

When the plant is connected to the grid, it will benefit more than 50,000 people and is estimated to reduce carbon emissions of up to 5,500 metric tonnes per year.

Meanwhile, US Ex-Im’s US$9.2mn loan will also be used to support the export of thin-film solar photovoltaic modules – this time from US firm Abound Solar to Punj Lloyd Solar Power.

The repayment of the 18-year loan will be based on the cash flows generated by the sale of electricity to NTPC Vidyut Vyapar Nigam.

The exports from Abound Solar will be used in the construction of a 5MW solar project on a 62.5-acre site near the village of Bap, about 145 kms from Jodhpur.

The project is also part of the Jawaharlal Nehru National Solar Mission.

The agreements were signed during an official visit to India by US Ex-Im chairman, Fred Hochberg, who is leading the business development mission to support the purchase of US goods and services by Indian buyers.

“India is a key country for US exports and an increasingly important market for US Ex-Im. In the first nine months of fiscal year 2011, the bank has approved US$1.4bn in transactions on behalf of American exporters and their Indian buyers. This financing has increased our overall exposure in India to US$5.5bn and supported over 10,000 American jobs,” says Hochberg.

“With this kind of growth in demand, we anticipate that next year India may very well become US Ex-Im’s biggest single market,” he adds.

So far in 2011, US Ex-Im has approved financing totalling approximately US$75mn for four solar projects in India and has around US$500mn of India solar projects in the pipeline that will generate an estimated 315 MW of solar power.