In a significant step towards meeting the Government’s target of 40-GW of rooftop solar installations, country’s largest lender State Bank of India (SBI) on Friday announced financing of 100-MW rooftop solar projects worth Rs 400 crore for private developers under a World Bank (WB) programme. This would add at least 100 MW of rooftop solar capacity to the grid, according to a joint statement made by SBI and World Bank.
“SBI has availed loan of $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.
“Financing is being provided to those with sound technical capacity, relevant experience, and creditworthiness, meeting the SBI standards,” it said.
The developers include Azure Power, Amplus, and Cleanmax amongst others. The capacity of the projects and programmes financed range from 25kWp to 16MW. “With this 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 SBI Deputy Managing Director Karnam Sekar.
Aided by the Government policy, he added, rooftop solar has a potential to transform the energy sector and SBI has so far provided Rs 30,000 crore finance to the clean energy projects which would eventually touch Rs 75,000 crore mark in next 5 years.
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 further said 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.
However, Riccardo Puliti, Senior Director, World Bank said, “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.”
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.