New Delhi: The World Bank’s Board has approved USD 625 million loan to support India’s grid connected rooftop solar programme to generate clean energy.
The Board also approved a co-financing loan of USD 120 million on concessional terms and a USD 5 million grant from Climate Investment Fund’s (CIF) Clean Technology Fund.
“The project will finance the installation of at least 400 MW of grid connected rooftop solar photovoltaic (GRPV) across India,” the World Bank said in a statement.
These solar PV installations, it said, will provide clean, renewable energy, and reduce GHG emissions by displacing thermal generation. The project will also strengthen the capacity of key institutions, and support the development of the overall solar PV market.
It will be implemented by the State Bank of India, which will on-lend funds to solar PV developers/ aggregators and end-users, who wish to invest in mainly commercial and industrial rooftop PV systems. Financing will be provided to those with sound technical capacity, relevant experience, and creditworthiness as per SBI standards.
“India is endowed with huge solar energy potential, and the World Bank is strongly supportive of the government’s plans to harness this potential and increase India’s solar PV capacity to 100 GW.
“This project will support this target, by providing financing to some of the 40 GW of solar PV which will be placed on rooftops,” said Onno Ruhl, World Bank Country Director in India.
Aided by government policy and declining costs, rooftop solar has the potential to transform the energy sector. The overall potential demand for rooftop solar is estimated at about 124,000 MW, the release said.
The loan, from the International Bank for Reconstruction and Development (IBRD), has a 19.5 year grace period, and a maturity of 20 years. Loan from CIF’s Clean Technology Fund, has a 10 year grace period, and a maturity of 40 years.
The IBRD-CIF loan will support a number of solar PV business models, to expand the reach of rooftop PV systems to a variety of customer groups. Accordingly, the range of options available to investors under the SBI Rooftop PV Program will include third-party ownership, leasing, rooftop rental, as well as direct end-user ownership.