State-owned Punjab National Bank has received $100 million (about Rs 645 crore) as the first tranche of ADB’s multi-million dollar funding for installation of rooftop solar systems in India. The $100 million loan agreement signed between the Asian Development Bank and PNB is backed by a guarantee from the central government.
PNB will deploy this fund as loan to various developers and end users to install large solar rooftop systems on industrial and commercial buildings throughout India, ADB said in a release.
“This is the first tranche loan of the $500 million multi-tranche finance facility Solar Rooftop Investment Program (SRIP) approved by ADB in 2016,” it said. As much as $330 million of this funding will come from ADB’s ordinary capital resources and $170 million from the multi-donor Clean Technology Fund (CTF). The first tranche loan comes from CTF.
The entire cost of SRIP is estimated at $1 billion and it aims to install solar rooftop system of around 1 gigawatt capacity in India. “This will contribute to the climate change goal of reducing greenhouse gas emissions by about 11 million tonne of carbon dioxide equivalent over the typical 25-year lifetime of rooftop solar systems,” ADB said.
India’s solar rooftop market is expanding fast with an estimated total capacity potential of 124 gigawatt (GW). “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.
The programme will contribute to Indian government’s plans to increase solar power generation capacity and also help it meet the carbon emission reduction target in line with its commitment at the recent global climate change agreement, Yokoyama said.
“The project is suitably aligned with the goals of government to increase country’s solar rooftop capacity by 40 GW by 2022,’ said Raj Kumar, Joint Secretary (Multilateral Institutions), Department of Economic Affairs.
The loan agreement was signed by Yokoyama of ADB and H K Parikh, General Manager, on behalf of PNB, while Kumar signed the guarantee agreement on part of the union government.