Suzlon confirmed lead-lender State Bank of India (SBI) has approved a plan the troubled Indian wind group hopes will allow it to restructure its $1.5bn-plus debt pile.

Suzlon’s shares rose 10% on Friday as it advised the Mumbai Stock Exchange of the approval, confirming a report from earlier this week.

The approval – subject to certain conditions and observations – is a boost to Suzlon, which is battling to regain financial stability under the pressure of debts that have hobbled its operational capability.

No details were give of the plan, which will have to be considered by Suzlon’s other lenders and is designed to stop Suzlon tipping into insolvency. That would mirror a previous restructuring in 2012/13.

Suzlon's own auditors said acceptance of the plan was crucial to the wind OEM's future prospects as a going concern.

Ashish Nainan, a Mumbai-based renewable energy analyst, told Recharge: “This is definitely in the right direction for Suzlon.

“Though this may be only the first step towards resolving Suzlon’s debt issue, with no significant suitors/bidders in sight for the debt burdened renewable energy company, other banks too may follow suit,” Nainan added.

Financial newswire Bloomberg Quint this week cited a senior banker familiar with the issue claiming that SBI had agreed to a 68% ‘haircut’ on what it’s owed.

Suzlon last year reportedly failed in efforts to put together plans involving investments from wind OEM Vestas and investor Brookfield, before settling on the current proposal.

Suzlon’s lenders were looking to extend a deadline to 30 April to reach a deal under a creditor ‘standstill agreement’, its auditor said last week.

Suzlon booked a net loss of 7.43bn rupees ($104m) for its latest financial quarter ending December 31, as it admitted its wind turbine operations were “at a subdued level with nominal allocation of capital”.

That was brought home by the figure of just 2MW – a single turbine – given for delivery volumes in the quarter, and 49MW for the last nine months, by a company that not too many years ago was among the biggest wind OEMs in the world.