World Bank to provide $750 million for rooftop solar PV in India

Share

While India’s solar market has been dominated by large utility-scale projects to date, the nation’s rooftop sector is about to get a major boost from the World Bank. On Friday, World Bank’s International Bank for Reconstruction and Development (IBRD) approved a US$625 million, 20-year loan to fund rooftop solar PV across the nation.

The bank has also approved a 40-year co-financing loan of $120 million and a $5 million rant from Climate Investment Fund’s (CIF) Clean Technology Fund.

Under India’s pre-existing Grid Connected Rooftop Solar and Small Solar Power Plants Program, State Bank of India (SBI) will receive and distribute the funds to developers and end-users, which it says will finance at least 400 MW of rooftop PV systems.

World Bank says that funding will go mainly to commercial and industrial systems, and applicants will have to meet SBI standards for technical capacity, relevant experience and creditworthiness. The organization also notes that the IBRD and CIF loans will support solar PV deployment under both third party-owned and direct ownership.

“Today, the only available option for those who want to install solar PV is to pay the entire cost up-front,” states World Bank Senior Energy Specialist Mohua Mukherjee, who served as team leader on the project. “The variety of financing mechanisms on offer under this program will represent a major innovation for the rooftop market.”

“Most importantly, the scope of the project will go beyond simply making finance available, it will also improve the investment climate for solar PV, and increase the `Ease of Doing Rooftop Business’.”

World Bank notes that rooftop PV has not become prevalent in India, despite a high cost of backup power and energy shortages. The bank joins a number of market analysts in naming a lack of adequate financing as a key hurdle, along with unfamiliar technology and a low level of consumer awareness.