World Bank Provides $165 M To Support RE In India’s Residential Sector

World Bank Backs Himachal Power Sector with USD 200mn

The World Bank Board of Executive Directors on June 28 approved of $165 million in additional financing to support India’s residential sector in adoption of rooftop solar systems and make solar energy more affordable, according to a press release issued by the World Bank. These solar photovoltaic (PV) installations will provide clean, renewable energy, and reduce greenhouse gas emissions by displacing generation based on fossil fuels. The funding is expected to contribute to to reduction of  greenhouse gas (GHG) emissions by 13.9 million tons. The financing is also an additional step beyond the central and occasional state subsidies already available for residential rooftop solar across the country.

“India’s power sector is a key contributor to air pollution and carbon emissions and represents about half of the country’s total energy-related CO2 emissions. It is imperative to decarbonize the power sector by significantly increasing the use of renewable energy,” said Hideki Mori, the World Bank’s Acting Country Director for India, as quoted by the press release. “This additional financing will increase India’s installed capacity of grid-connected rooftop solar and help India towards its goal of sourcing 50 percent of its energy needs from renewable sources by 2030.”

India currently ranks fifth globally in terms of annual solar power generation. However, significant land area is required to set up renewable energy plants, particularly the large-scale ground-mounted solar power projects. The government therefore is looking to increase the country’s rooftop solar capacity.

Global Investment On Energy To Increase By 8% In 2022: IEA

Also Read

The World Bank has been supporting India’s programme to generate electricity from rooftop solar since 2017 with financing of $648 million for the Grid-Connected Rooftop Solar Programme. The additional financing will help scale up and expand the Program to cover the residential sector and support the government’s target of 40 gigawatts (GW) of solar rooftop installations.

Most residential consumers in India pay less for electricity than commercial or industrial consumers and therefore have less incentive to shift to rooftop solar. Absence of affordable financing and innovative business models and high up-front capital cost exacerbates this challenge.

The additional financing will directly finance 450 MW of rooftop solar capacity in the residential sector. Importantly, the project will provide concessional financing to developers and residential consumers and mobilize additional private capital. It aims to mobilize $71 million of private capital, in addition to the $151.61 million that has been mobilized so far.

UN Secy Gen Calls Renewable Energy A Lifeline To World

Also Read

The additional financing includes a $150 million loan from the International Bank for Reconstruction and Development (IBRD), and another $15 million from the IBRD Fund for Innovative Global Public Goods Solutions.