The Asian Development Bank (ADB) and Punjab National Bank (PNB) signed a US$ 100 million loan — to be guaranteed by the Government of India — that will finance large solar rooftop systems on industrial and commercial buildings throughout India. The PNB will use the ADB funds to make further loans to various developers and end users to install rooftop solar systems.
This is the first tranche loan of the US$ 500 million multi tranche finance facility Solar Rooftop Investment Program (SRIP) approved by ADB in 2016. The financing includes US$ 330 million from ADB’s ordinary capital resources and US$ 170 million from the multi donor Clean Technology Fund (CTF) administered by ADB. The first tranche loan of US$ 100 million would be financed entirely from the CTF.
“With a sharp drop in the price of solar panels, India has a huge potential to expand its use of solar rooftop technologies,” said Kenichi Yokoyama, ADB Country Director in India after signing the loan. “The programme will contribute to the government’s plans to increase solar power generation capacity, and also help India meet the carbon emission reduction target in line with its commitment at the recent global climate change agreement.” India’s solar rooftop market is expanding fast with an estimated total capacity potential of 124 GW.
“The project is aligned with the goal set by Government of India to increase the country’s solar rooftop capacity by 40 GW by 2022, and would also contribute to Government’s efforts to promote solar energy solutions as affordable and sustainable energy sources,” said Raj Kumar, Joint Secretary, Department of Economic Affairs, Ministry of Finance, Government of India, , who signed the Guarantee Agreement for Government of India. The loan agreement was signed by HK Parikh, General Manager, PNB.
The entire Solar Rooftop Investment Program will cost US$1 billion, inclusive of ADB US$ 500 million funding, and the projects financed under the programme will install solar rooftop system of around 1 GW capacity. This will contribute to the climate change goal of reducing greenhouse gas emissions by about 11 million tonnes of carbon dioxide equivalent over the typical 25-year lifetime of rooftop solar systems.