The board of World Bank has approved a $625 million loan to support the central government’s programme to generate electricity from rooftop solar power plants.
Over 200 million people in India are not connected to the electricity grid and those who face frequent disruptions due to power shortages, hampering industrial output and leaving many industries reliant on expensive and polluting diesel-based back up power supplies.
A lack of available financing has meant that those who are aware of and would like to install rooftop solar panels have had to pay the full cost upfront, and uptake has remained low despite the country’s huge solar energy potential.
The project aims to finance the installation of at least 400 MW of rooftop solar photovoltaic (PV) panels across India, to be connected to the grid, contributing to a government target to increase India’s solar PV capacity to 100GW.
It also hopes to strengthen the capacity of key institutions, support the development of the overall solar PV market and expand its reach to a variety of customer groups.
It will cater to customers who can afford to develop and own their rooftop systems as well as others who prefer a pay-to-use model that doesn’t involve outright ownership.
The State Bank of India will on-lend the funds to solar developers, aggregators and end users investing in mainly commercial and industrial rooftop systems, working to ensure their use becomes much more widespread.
The $625m loan from the bank’s concessional lending arm, the International Bank for Reconstruction and Development, will be complemented with $125m of concessional co-financing and a $5m grant from the Climate Investment Fund.