India Secures $240M Loan from ADB For Solar Infrastructure Development

Indian government has been approved a loan of USD 240.5 million by The Asian Development Bank (ABD) to finance rooftop solar system in India, supporting government’s efforts to expand energy access through renewable energy.

The ADB said that this financing will support tranches 2 and 3 of the Multitranche Financing Facility (MFF) Solar Rooftop Investment Program, primarily approved by ADB in 2016. In 2023, the program was updated to focus on organizing residential solar rooftop systems.

Kaoru Ogino, the principal Energy Specialist of ADB, said, "India aims to achieve about 50 percent of cumulative electric power installed capacity from non-fossil fuel energy sources by 2030 in line with its global commitments to reduce carbon emissions. ADB's financing supports these goals and will contribute to the Prime Minister's Surya Ghar program, which encourages people to install rooftop solar panels across the country".

The approved financing will be allocated to the State Bank of India (SBI) and the National Bank for Agriculture and Rural Development (NABARD). These institutions will provide loans to developers and end-users throughout India for the installation of rooftop solar systems.

Specifically, ADB will provide SBI with USD 90.5 million from its Clean Technology Fund (CTF), while NABARD will receive USD 150 million--comprising USD 80 million from ADB's ordinary capital resources and USD 70 million from the CTF.

ADB stated that the installation of rooftop solar systems offers significant benefits to the overall power distribution system. It can reduce the technical and operational burden by generating electricity close to where it is consumed, thereby reducing the need for long-distance power supply and the associated system losses.

Moreover, the implementation of rooftop solar systems aligns with India's wider energy and environmental goals. By increasing the share of renewable energy, India can reduce its need on fossil energies, thus cutting greenhouse gas emissions and progressing for a better environment.