U.S. International Development Finance Corporation (DFC), the country's development bank, today (Dec 7) announced that it approved up to $500 million of debt financing for First Solar Inc., the largest American solar manufacturing company to build a solar-panel factory in Tamil Nadu, India

The seven-year, debt-financing loan is one of the biggest deals in the history of the agency,

The DFC financing will support the First Solar's previously announced vertically integrated photovoltaic (PV) solar module manufacturing facility in Tamil Nadu, India, with a projected annual capacity of 3.3 gigawatts (GW). The $684 million facility will commence operations in the second half of 2023.

DFC said that it most of the new facility’s production will sell into the quickly growing solar market in India, a Quad ally and key partner to the U.S. in the Indo-Pacific region.

DFC's decision to support First Solar's new manufacturing facility in India is seen as a part of U.S administration effort to diversify the solar supply chain and derisk from Chinese dependence. China currently controls the production of solar panels, accounting for more than 70% of global production.

DFC’ said that proposed financing is to support Government of India’s ambitious renewable energy goals.

"Prime Minister Modi has launched a comprehensive effort to install 500GW of renewable power generation in India, which will help save lives by reducing pollution in major cities and contributing to the response to the climate crisis." DFC said in a statement.

First Solar is among the world’s ten largest solar manufacturers. It recently it unveiled plans for a new $680 million factory in Ohio that will add 3.3GW of new domestic manufacturing capacity in the United States by 2023. The company expects to reach 16GW of global manufacturing capacity in 2024.

First Solar said its manufacturing process also allows it to produce solar modules with a carbon footprint that is 2.5-times lower, a water footprint that is three times lower, and an energy payback time that is twice as fast as crystalline silicon (c-Si) panels made in China. The company's PV modules are designed and developed at R&D labs in California and Ohio.

In December 2020, First Solar signed an MOU with the then Edapadi Palaniswamy-led AIADMK government for investing ₹4,185 crore in a manufacturing facility.