World Bank announces financial package to support PM Surya Ghar Muft Bijli Yojana

The World Bank has approved a financing package to support India’s national programme for solar rooftops ‘PM Surya Ghar: Muft Bijli Yojana’ that aims to bring clean energy to millions of homes and create 17 lakhs job opportunities across the renewable energy manufacturing, installation, and services value chain.

The financing package for the programme includes an $820 million loan from the International Bank for Reconstruction and Development (IBRD), a $60 million concessional loan from the Clean Technology Fund, and a $10 million grant from IBRD’s Livable Planet Fund. In addition, the World Bank will mobilize $4.2 billion in private financing in the form of commercial loans enabling them to install solar rooftops for households.

“The World Bank has been supporting India’s solar rooftop sector for over a decade, mobilizing more than $2 billion to catalyze market growth from 500 MW to over 27 GW of installed capacity,” said Paul Proccee, World Bank Acting Country Director for India. “This new financing will help India scale up residential solar, while creating job opportunities across the supply chain and installation ecosystem.”

According to Moez Cherif, Task Team Leader of the programme, the programme will transform the residential solar market by removing financial barriers and building the capacity of distribution companies, banks, and vendors to deliver integrated service solutions. “Through collateral-free financing, households can install solar power and significantly reduce their monthly electricity bills”, Cherif said.

The Clean Technology Fund (CTF) supports the piloting and scale-up of promising low-carbon technologies in developing countries, through low-cost finance for renewable energy, energy efficiency, sustainable transport, and green industry projects. The Livable Planet Fund (LPF) is a multi-donor trust fund managed by the World Bank, and provides price incentives to middle-income countries to deliver on global public goods through additional International Bank for Reconstruction and Development (IBRD) operations.

The PM Surya Ghar programme incentivises solar rooftop installation for 1 crore rural and urban households nationwide, reduce household electricity costs, and encourage local manufacturing of solar rooftop equipment.

India has committed to achieving net zero by 2070 and increasing non-fossil-fuel-based energy resources to 60% of its electricity mix by 2035.