Rajasthan Farmers to Get Collateral-free Loan to Install Solar Plants

Farmers in Rajasthan will now be able to acquire loans from banks without depositing any collateral (security) for solar plants ranging from half a kilowatt to two megawatts on barren and waste land under PM Kusum yojana, according to recent media reports.

Farmers who wish to build the plant will no longer have to mortgage anything to get a loan. Dr. Subodh Agrawal, Additional Chief Secretary, Energy Department said that farmers in Rajasthan were facing problem in obtaining bank loans hence solar plant initiative was getting delayed. Hence it was decided to provide collateral-free loans to farmers.

Agrawal said that Haryana Chief Minister Ashok Gehlot is committed to put the initiative into action. They’ve also requested the Central government to make it easier for farmers to participate in this scheme. Farmers were given the opportunity to speak directly with banks about a variety of topics. Following this, banks have agreed to make loans without the need for collateral.

According to Dr. Agrawal, Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM Yojana) is being divided in three components. Solar energy plants with capacities ranging from half a kilowatt to two megawatts can be built within a five-kilometre radius of a Rajasthan Electricity Distribution Corporations 33/11 KV substation on barren and useless land owned by farmers.

The electricity generated by these solar plants would be purchased at a rate of Rs.3 14 paise for a period of 25 years. For the farmer who produces solar energy, a 25-year agreement to purchase electricity has been made. The DISCOMs will deposit the loan instalment immediately into the renters’ bank accounts under the terms of the agreement. The remaining funds will be deposited in the tenant’s account.

As per Chief Secretary, 11 plants have been created in the state as part of the PM Kusum Yojana. 623 applications for a total capacity of 722 MW have been received by Renewable Energy Corporation. Canara Bank’s DGM, Arun Kumar Arya, has stated that the bank will disburse the loan for the solar facility without any collateral. He stated that attempts will be made to minimize the loan’s interest rate under this arrangement.