Planning for growing solar development in India has received a solid boost from the World Bank, following board approval of a $625 million loan to support India’s grid connected rooftop solar program to generate clean energy.
According to The Economic Times, the board also approved a co-financing loan of $120 million and a $5 million grant from the Climate Investment Fund.
“The project will finance the installation of at least 400 MW of grid connected rooftop solar photovoltaic across India,” the World Bank said in its press statement.
These solar PV installations will provide clean, renewable energy, and reduce GHG emissions by displacing thermal generation.
The aim of this project is intended to strengthen the capacity of key institutions, and support the development of the overall solar PV market.
“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,” said Onno Ruhl, World Bank country director in India. “This project will support this target, by providing financing to some of the 40 GW of solar PV which will be placed on rooftops,”
This financing represents an important step forward in addressing global climate change and reducing CO2 emissions from fossil fuel power generating plants relying on coal. Based on World Bank data, 72.8% of Indian electricity production in 2013 came from coal sources.
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, with a 20-year maturity. The 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 in order to expand the reach of rooftop PV systems to a variety of customer groups.
Image via Shutterstock