World Bank signs project to scale up innovative renewable energy technologies in India
New Delhi, December 16, 2022
The Government of India, Solar Energy Corporation of India Limited (SECI), and the World Bank have signed agreements for a $ 150 million IBRD loan, a $ 28 million Clean Technology Fund (CTF) loan and a $ 22 million CTF grant to help India increase its power generation capacity through cleaner, renewable energy sources.
The agreement underscores the Government of India’s commitment to achieve 500 giga-watts (GW) of renewable energy by 2030 in order to address the challenges of climate change, a press release from the World Bank said.
The agreement was signed by Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs, Ministry of Finance on behalf of the Government of India; C. Kannan, Director Finance, on behalf of SECI; and Hideki Mori, Operations Manager & Acting Country Director, India, World Bank.
“India’s transition to renewable sources of energy is one of the most critical transitions for its future,” said Mori. “The World Bank is committed to supporting India during this transition. This project will bring in international experience in deploying new technologies to the sector and support India’s progress in adopting cleaner, renewable energy fuels.”
The release said the project aims to address constraints in commercial investments in this sector through increasing the confidence of the various stakeholders. The project will also help SECI increase market uptake by addressing the barriers to deploying new technologies at scale.
The first solar sub-project is being constructed by Battery Energy Solar Systems (BESS) in Rajnandgaon district in Chhattisgarh. The second sub-project which will have floating solar panels is being set up at the Getalsud reservoir in the state of Jharkhand.
India currently has an installed capacity of more than 409 GW, of which the renewable energy (non-hydro) share is almost 29 per cent (119.5 GW). The project will accelerate India’s progress towards sustainable universal electricity access, which is a key milestone for achieving inclusive economic development objectives.
Strengthening SECI’s capacity is critical to achieving India’s installed RE capacity by 2030 and net zero emission target by 2070. The project will support SECI with human resource and business planning, project monitoring, procurement, financial and contract management, environmental and social safeguards and financial management, among others.
“SECI, the Government of India’s nodal agency, is pivotal to pushing the frontiers in mainstreaming renewable energy within the country to accelerate its energy transitions journey. This engagement attempts to introduce nascent technologies in the renewable energy sector at a relatively larger scale. The sub-projects financed under this project aim to displace fossil-fuel based generation by positioning renewable energy to meet peak power demand, establish ecosystem to attract private sector investments, and support institutional strengthening,” said Surbhi Goyal, Senior Energy Specialist and World Bank’s Task Team Leader for the project.
The $ 150 million loan from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a maturity of 25 years. The $ 28 million loan from the Clean Technology Fund (CTF) has a 10-year grace period, and a maturity of 40 years. The $ 22 million is an interest-free CTF grant.