Foreign bodies pledge $5 bn for solar mission

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New Delhi | Published: January 27, 2015 3:00:34 AM

The government's ambitious plan of achieving 100 GW of solar capacity by 2022 has managed to enthuse foreign financial...

The government’s ambitious plan of achieving 100 GW of solar capacity by 2022 has managed to enthuse foreign financial institutions to commit nearly $5 billion so far to the country’s solar mission.

German bank Kreditanstalt fur Wiederaufbau (KfW) has turned out to be the biggest lender with a commitment of $1 billion to the green energy corridor that is aimed at synchronising electricity produced from renewable sources, such as solar and wind, with conventional power stations in the grid.

The ministry of new and renewable energy is also in the final stages of negotiation with KfW for another billion dollars for installation of rooftop panels. Apart from KfW, US EXIM Bank has already pledged $1 billion, while the government expects the same amount to come from a combination of loans from the World Bank and the ADB.

“We require funding to the tune of $110 billion to achieve our target of 100 GW. The commitment from foreign lenders has been heartening but it’s not nearly enough as we need $20 billion every year. However, we are hoping to gain further momentum once we unveil details of the plan in the coming days,” a government official told FE.

The government is also likely to rope in public sector lenders like Rural Electricity Corp (REC) and Power Finance Corp (PFC) to float a corpus for funding solar installations. A global investor summit will also be held in February to attract more funding into the sector.

As per year-wise plan drawn up by the ministry, India will add 7 GW of solar capacity in the next fiscal. The goal for next three fiscal years will be to ramp up capacity by 18 GW, 22 GW and 25 GW respectively. As per renewable energy consultancy firm Bridge to India, no country has ever added 18 GW of capacity in a year.

Furthermore, to augment the massive scale of solar power installation, government has also urged companies, both private and public, to commit to installing some capacity of solar power.

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