India’s Vikram to Invest $726 Million to Make Solar Equipment

(Bloomberg) -- India’s Vikram Solar Ltd. is planning to invest 54.32 billion rupees ($726 million) to make solar energy equipment in the South Asian country, which is encouraging domestic manufacturing to reduce imports.

The company will build a factory in the southern Tamil Nadu province, the state government said Monday. The 3-gigawatt plant, expected to be completed in five years, will make wafers, cells and modules, Kolkata-based Vikram Solar said in a separate statement. It did not mention the planned investment.

Prime Minister Narendra Modi’s administration is keen to boost local manufacturing of solar cells and modules to support its ambitious growth plans of expanding renewable energy capacity by more than five-fold to 450 gigawatts over the next decade. The efforts are part of a broader self-reliance campaign by the government to reduce imports and boost domestic industry to generate jobs and revive an economy that’s set for an annual contraction in four decades due to the coronavirus pandemic.

To lure investors, the renewable energy ministry has proposed tariffs on imports of solar cells and modules to help firms compete with cheaper imports. The proposal comes amid recent border tensions with China, which supplies nearly 80% of India’s solar modules.

The incentives are beginning to draw investors. Vikram’s pact with Tamil Nadu follows last week’s announcement by ReNew Power Pvt., which said the company plans to invest as much as 20 billion rupees for setting up a 2-gigawatt cells and modules making facility. The renewable power producer is in talks with various Indian states for the venture, it said.

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