The World Bank has approved a $100 million loan to help India finance its plan to install 100 gigawatts of solar power on its way to 175 gigawatts of renewable energy capacity by 2022. The Shared Infrastructure for Solar Parks Project will develop large-scale solar generating facilities throughout the country and assist the Indian Renewable Energy Development Agency (IREDA). IREDA will use the funding to expand its grid by building infrastructure needed to bring electricity to people in more of India.
The loan expands on the World Bank's investment in India’s renewable energy growth to help it avoid the environmental impacts of fossil-fuel fired electricity sources as it empowers more of its people. The institution previously approved a $625 million loan to the State Bank of India to develop 400 megawatts of commercial and industrial rooftop solar in June 2016.
“India’s goal of scaling up the provision of clean energy will require a vibrant market for solar investments,” said Junaid Ahmad, World Bank country director in India. “The challenge for this project is to go beyond investments; it is to deepen the solar market.”
As India’s economy rapidly expands and gains global trade influence, the country’s power demands far exceed its energy generating capacity. India has around 314 gigawatts of renewable energy capacity currently installed. However, its power consumption is less than one-third of the global average and an estimated 300 million people do not have access to electricity.
Two projects in Madhya Pradesh, totaling 1 gigawatt of solar, were selected as the first locations for installation under the latest round of funding. A project in Rewa will bring 750 megawatts of solar online. Another 250 megawatt solar project will be developed in Mandsaur. IREDA will provide support for business planning, project monitoring and financial management for each project. Additional locations are under consideration in Odisha, Chhattisgarh, and Haryana.
“Through this engagement, it is expected that the investments will boost market confidence, enable demonstration of economies of scale in large-scale grid-connected solar generation, contribute towards pushing down equipment and transaction costs, increase efficiency while reducing unit costs of solar power, and catalyze further support from other investor groups to help India achieve its ambitious targets by 2022,” said Surbhi Goyal, senior energy specialist and World Bank’s task team leader for the project.Tweet