The World Bank plans to introduce a $100-million credit guarantee scheme to boost India’s rooftop solar programme, which has not gained enough traction.
The scheme will allow micro, small, and medium enterprises (MSMEs) to avail concessional debt financing for setting up rooftop solar units, said two people aware of the development requesting anonymity.
The World Bank scheme, along with State Bank of India (SBI) and the MSME ministry to accelerate adoption of rooftop solar units, will help MSMEs access credit of around $1 billion. The arrangement will be beneficial for the firms that often do not meet the lending criteria of banks and other financial institutions, with their financial woes been exacerbated by the covid-19 pandemic.
This assumes significance given that India added around 4 gigawatts (GW) of rooftop solar capacity out of its 40GW target by 2022. Rooftop solar installations are part of India’s renewable energy target of 175GW to help reduce its carbon footprint by 33-35% from the 2005 levels, as part of global climate change transition commitments adopted by 195 countries in Paris in 2015.
“The World Bank is collaborating with SBI to implement a $648 million financing and technical assistance programme for solar rooftops. Through the programme, concessional debt financing is provided for commercial and industrial consumers including MSMEs,” a World Bank spokesperson said in an emailed response.