The Asian Development Bank (ADB), in collaboration with Punjab National Bank, announced plans to provide $500 million in financing for rooftop solar systems in India.
Under the terms of this partnership, Punjab National Bank, a leading commercial bank in India, will use the ADB funds to make loans to various developers and end users throughout India to install rooftop solar systems.
The financing comprises $330 million from ADB and $170 million from the multi-donor Clean Technology Fund administered by ADB. This funding should mean that 11 million fewer tons of greenhouse gases are emitted over the typical 25-year lifetime of solar rooftop systems.
Combined with an additional $300 million in subproject equity investment and $200 million in loans from commercial banks and other financiers, the entire cost of the Solar Rooftop Investment Program is $1 billion.
“There is huge potential for India to expand its use of solar rooftop technologies because of the sharp drop in the price of solar panels, meaning the cost of producing solar energy is at or close to that from fossil fuels,” said Anqian Huang, finance specialist in ADB’s South Asia Department.
“Sourcing more solar energy will also help India meet the carbon emissions reduction target that it has committed to as part of the recent global climate change agreement,” Huang added.
The financing comprises $330 million from ADB and $170 million from the multi-donor Clean Technology Fund administered by ADB. This funding should mean that 11 million fewer tons of greenhouse gases are emitted over the typical 25-year lifetime of solar rooftop systems.
To help the country meet its solar energy targets and climate commitments at Paris, ADB has also committed to doubling its annual financing for climate mitigation and adaptation to $6 billion by 2020.
The solar rooftop market is still at an early stage of development in India and awareness of the latest technologies and the financial benefits is low. Banks see lending to such projects as risky, in part because they have limited past experiences, according to ADB.
In this context, an additional $5 million technical assistance from the multi-donor Clean Technology Fund, administered by ADB, will be used to provide training, promote market development, and raise market awareness.
Rajani Baburajan