World Bank interested in financing solar projects in India

Tuesday, December 24, 2013: The National Solar Mission is all set to enter the next phase. Impressed by the first phase of the mission, the World Bank has launched consultations with the ministries of finance and new and renewable energy showing interest in financing solar projects that fall under phase II of the National Solar Mission.

Ashish Khanna, lead energy specialist told Business Standard, “The World Bank is really impressed with the performance of phase I of the National Solar Mission wherein, the installed capacity has risen to 2,000 Mw from 30 Mw. The World Bank was engaged with the ministry of new and renewable energy during phase I in working out the policy and putting in place necessary guidelines but had not provided funds. However, during phase II, the World bank is quite keen to finance solar projects.”

The total fund requirement is approximately Rs 800 billion ($13 billion), out of which as high as Rs 540 billion ($9 billion) will be based on debt on a 70:30 debt equity ratio. The World Bank has shown interest in partially financing debt requirement.

Khanna further added, “During the first phase, commercial banks had lent $700 million and they need to scale up to the levels envisaged. In order to make investment in solar power more attractive for scheduled commercial banks, the government will need to strategically use scarce public resources to leverage commercial financing, address structural barriers that prevent commercial banks from participating and facilitate appropriate technology deployment.”