The Indian government is reportedly in discussions with international funding and lending agencies to secure at least US$3 billion to finance plans to build multiple gigawatts of new solar capacity.
Indian business news site LiveMint reports that discussions are underway between government officials and the Asian Development Bank, World Bank, Germany’s KfW bank, the Japan International Cooperation Agency (JICA) and the Japan Bank for International Cooperation (JBIC).
Since taking power last year, the government of prime minster Narendra Modi has made solar power a priority and set an ambitious target of 100GW of new PV capacity by 2022.
Investors have begun queuing up for a slice the action, with a frenzy of activity at the end of 2014 and in early 2015 resulting in a number of large project memoranda of understanding between state governments and international companies.
The nature of some of these agreements raised eyebrows at the time, with some questioning the viability of the proposals being made. But news that international financial institutions are being engaged will reinforce the credibility of India’s solar plans.
One anonymous senior official cited by LiveMint said the government was talking to both the ADB and World Bank about two US$500 million loans from each institution, for solar parks and rooftops respectively.
The government is also seeking US$1 billion from KfW and funds of an unspecified amount from JICA and JBIC, the official said.
Talks are also ongoing with the European Investment Bank and France’s AFD development bank, both of which the Indian government hopes to tap for loans.