The World Bank recently approved a $625 million loan to support a program that will generate electricity from a countrywide installations of rooftop solar systems in India. The project will be implemented by the State Bank of India (SBI), which will lend funds to solar developers/aggregators to install commercial and industrial rooftop PV systems. The project will finance the installation of at least 400 megawatts (MW) of grid-connected rooftop photovoltaic (GRPV) across the country.
More than 200 million people in India remain unconnected to the electricity grid, and those who are connected experience frequent disruptions. Access to solar has the potential to impact India’s economy by minimizing shortages that affect industrial output, while also replacing the expensive diesel-based back-up power supplies currently being used. Onno Ruhl, World Bank Country Director in India explains that, “Solar PV will not only improve access to electricity, but it will do so in a manner that avoids the environmental impacts of other traditional electricity sources.”
In the past barriers to institutional and private financing, unfamiliar technology, and low consumer awareness had prevented rooftop solar PV systems from becoming as widespread as they could be in India. But now, due to government aid and declining costs, the energy sector is transforming in the country. India is likely to have 13 percent of the world’s solar installations by 2020, according to a recent report released by GTM Research, up from its current 4 percent share of the world’s solar installations.
The World Bank loan carries a 19.5 year grace period, and a maturity of 20 years. The co-financing loan of $120 million and $5 million grant from the Climate Investment Fund’s (CIF) Clean Technology Fund has a 10 year grace period, and a maturity of 40 years. These long-term loans and grants will help make it possible for India to reach the ambitious goal set by Prime Minister Narendra Modi, to grow its electric capacity to 100 gigawatts by 2022.
Even more recently Modi met with US President Barack Obama to strengthen the ties between the two countries and to increase US efforts to expand solar power in India.Tweet