How solar project finance works in India (IREDA & banks)
70:30 debt-equity, the rate that depends on your DPR, and what lenders demand.
A bankable solar project is funded mostly with debt — and the quality of your DPR decides how much, and at what rate. Here is how lenders like IREDA and the banks actually structure a solar loan.
The structure
Standard is 70:30 debt-equity (CERC norm), with IREDA going to 75:25 if the average DSCR is ≥1.25. IREDA’s FY26 solar rates run 8.65–9.65% with no construction-period premium; tenure is 10–15 years plus a 6–18 month moratorium from commissioning.
What lenders demand
A consultant-prepared DPR (sized on P90 generation, not the optimistic P50), a signed PPA, audited financials, a sponsor credit rating, clean land title and assigned approvals — secured by a first charge on assets, a Trust & Retention Account and a Debt Service Reserve. A weak DPR means less debt, more equity and a worse rate.