State Bank of India (SBI) today announced financing of 100 MW rooftop solar projects worth Rs 400 crore for private developers under a World Bank programme.
This would add at least 100 MW of rooftop solar capacity to the grid, and is a significant step towards meeting the government's target of 40 GW of rooftop solar installations, SBI and World Bank said in a joint statement.
"SBI has availed loan of USD 625 million from the World Bank for on-lending to viable Grid-Connected Rooftop Solar PV (GRPV) projects undertaken by PV developers/aggregators and end-users, for installation of rooftop solar systems on the rooftops of commercial, institutional and industrial buildings," the statement said.
The implementation of the programme by the SBI will support the installation of more than 600 MW of rooftop solar capacity.
With the World Bank funded capacity development programme, SBI is making efforts to expand and incentivise the market for rooftop solar power by way of low cost financing.
Financing is being provided to those with sound technical capacity, relevant experience, and creditworthiness, meeting the SBI standards, it said.
The developers that the SBI will be financing under this programme include Azure Power, Amplus, and Cleanmax amongst others. The capacity of the projects and programmes financed range from 25kWp to 16MW.
"With the World Bank loan, SBI aims at developing the nascent rooftop solar market. As a tropical country, India has a huge potential to be the leader in the rooftop solar space," said Karnam Sekar, Deputy Managing Director, SBI.
In order to accelerate demand for rooftop solar systems in the market, SBI has developed financing models that will provide loans at a very competitive pricing with long tenor.
The SBI has so far sanctioned GRPV projects with aggregate capacity of 100 MW, and proposals are in the pipeline with aggregate capacity of around 125 MW.
Sekar also informed reporters later that against the normal lending rate of 11-12 per cent, the SBI is financing the projects at a rate which is upto 3.5 percentage point less because the bank is able to leverage World Bank funding at lower rates.
He also said that aided by government policy and declining costs, rooftop solar has a potential to transform the energy sector.
He also said that SBI has so far provided Rs 30,000 crore finance to the clean energy projects which would eventually touch Rs 75,000 crore mark by 2022.
He also informed that SBI is planning to raise money through green bonds for funding renewable energy projects in the country.
"Through this project and others like it, tens of millions of electricity customers will eventually be able to generate part of their own electricity needs from one of the cleanest sources of energy available," said Riccardo Puliti, Senior Director, World Bank, in the statement.
India is one of the lowest per capita consumers of electricity in the world. Over 200 million people remain unconnected to the electricity grid, and those who are, continue to face frequent disruptions, it said.
Despite energy shortages, and the high cost of backup supply, rooftop solar PV systems have not yet become widespread in India.
The World Bank-Clean Technology Fund (CTF) loan will support a number of solar PV business models, to expand the reach of rooftop PV systems to a variety of customer groups.
A range of options available to investors under the SBI Rooftop PV Programme will include third-party ownership, leasing, rooftop rental, as well as direct end-user ownership.
The World Bank is also providing a Global Environment Facility (GEF) grant to support the overall capacity development of the sector.
This grant will support an innovative risk mitigation mechanism to enable lending to small and medium enterprises (SME), commercial and industrial customers for GRPV, and to support strengthening of the investment climate and capacity building of the main stakeholders involved in the expansion of GRPV.
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