India’s rooftop solar power program received a major boost from the World Bank after that international financial institution approved a huge sum of debt funding.
The World Bank recently announced that it approved $625 million to facilitate the implementation of rooftop solar power projects in India. The funding will be provided by the International Bank for Reconstruction and Development (IBRD). Additional funding worth $120 million has also been approved at a concessional rate, while a $5 million grant will be issued by Climate Investment Fund’s (CIF) Clean Technology Fund.
This funding is expected to finance the installation of 400 MW of rooftop solar power projects. The funding will primarily be available to the industrial and commercial sector, to which the Indian government does not offer any capital subsidies. The funding will be disbursed by the largest bank in India, the State Bank of India.
The loan, from the International Bank for Reconstruction and Development (IBRD), has a 19.5 year grace period, and a maturity of 20 years. The loan from CIF’s Clean Technology Fund has a 10 year grace period, and a maturity of 40 years.
India plans to have 40 GW of operational rooftop solar power capacity by March 2022. This target will require a monumental effort on the part of the government and all other stakeholders.
Last year, the Indian government approved a plan to increase subsidies for rooftop solar power projects from the current Rs 600 crore (US$92 million) to Rs 5,000 crore (US$770 million). The subsidy will be available to households, government institutions, hospitals, and educational institutions, among others. The financial support will not be available to private sector entities like industries and commercial consumers.
In January, the Ministry of New & Renewable Energy (MNRE) announced that the World Bank, the Asian Development Bank, and the newly-founded BRICS development bank will provide $500 million each for the development of rooftop solar power projects in the country.
Recently, the Solar Energy Corporation of India launched the country’s largest-ever rooftop solar power tender for the implementation of 500 MW of capacity.