Structuring project finance for a 250 MW utility-scale solar PV project

India’s rapidly expanding renewable energy sector has attracted significant domestic and international investment. However, financing utility-scale solar projects requires lenders to balance aggressive tariff bidding with long-term project viability. Key challenges included assessing revenue certainty under long-term power purchase agreements (PPAs), evaluating construction and operational risks, determining an optimal debt structure, and ensuring compliance with lender risk and regulatory requirements.

As Project Finance Manager at Power Finance Corporation (PFC), Sanjeet Kumar led the credit appraisal and financing assessment for a 250 MW grid-connected solar PV project. The assignment involved detailed financial modelling, sensitivity and scenario analysis, debt sizing based on DSCR, review of EPC and O&M contracts, assessment of resource risk and project cash flows, evaluation of sponsor capability, and structuring financing terms aligned with the project’s risk profile. Close coordination was undertaken with developers, technical consultants, legal advisors, and internal credit committees throughout the appraisal process.

The financing structure supported the successful financial closure of the project while maintaining prudent lender risk parameters. The analysis provided confidence in the project’s long-term bankability through appropriately structured repayment schedules, covenant packages, and risk allocation mechanisms. The transaction contributed to expanding India’s renewable energy capacity while demonstrating a balanced approach between competitive project economics and robust credit quality.