KfW Grants EUR 150M Loan to Back Solar in India

India has set itself the ambitious goal of expanding solar energy eightfold in the coming years. KfW is promoting this on behalf of the German Federal Government with a loan of EUR 150 million.

The contract was signed on 8 November. This is already the second loan with India's largest state bank, the State Bank of India (SBI), as part of the solar partnership with India.

Another loan for the same amount has already been successfully disbursed. The supported plants will produce a total of more than 600,000 megawatt hours annually. Furthermore, the measures will reduce the increase in greenhouse gas emissions by 500,000 tonnes of CO2 per year.

Still 20% of the Indian population is not connected to the electricity grid. The government is pushing ahead with electrification. Households already supplied with energy will also demand more electricity in the future, so a rapid increase in consumption is to be expected. This will also emit more greenhouse gases.

India is already the third largest emitter in the world after China and the USA. One third of India's emissions are due to power generation.

To ensure that greenhouse gas emissions do not increase further due to electrification, India is focusing on the use of renewable energies, whose share is currently around 17.5% and has increased in recent years. The goals are ambitious: By 2030, the capacity for electricity from renewable energies is to be 500 gigawatts.

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), KfW is implementing a solar partnership with India to promote the expansion of solar energy.

It has already provided EUR 150 million for this purpose, and now another EUR 150 million is being added. These will be granted as loans to project developers via the SBI.

“We want to sensitise the market to the issue and hope that in future project providers will also pay attention to compliance with the standards in other projects not promoted by KfW,” explains KfW portfolio manager Jördis Flöther.