India eyes $ 1.1 billion solar loan from German bank KFW

Thursday, 14 May 2015 01:54 - - {{hitsCtrl.values.hits}}

NEW DELHI (Reuters): German development bank KFW could lend India $ 1.1 billion for rooftop solar projects, on top of another loan it has extended to help the Asian country fund its ambitious green energy plans, India’s top renewable energy bureaucrat told Reuters.

Prime Minister Narendra Modi wants to quintuple India’s renewable energy capacity to 175 gigawatts by 2022, making clean energy part of his fight against climate change without necessarily committing to a timeline for emission cuts.

KFW has already offered India a loan of about 1.38 billion euros ($ 1.55 billion) to help build a “green corridor” of power lines through nine states, and Modi’s visit last month to Germany helped advance talks on the rooftop plans, said Upendra Tripathy, secretary in the Ministry of New and Renewable Energy.

“The Prime Minister discussed this and KFW in principle agreed to examine our request,” Tripathy said on Tuesday. “We are looking for low-cost loans.”

KFW, which said in December it would extend a 1 billion euro loan for the power transmission project, could not be reached for comment on Tuesday.

Tripathy said the government had also sought $ 750 million from the World Bank and $ 500 million from the Asian Development Bank to help keep up the momentum in expanding its clean energy programs.

India’s renewable energy investments rose to $4 billion last fiscal year to 31 March from $ 3.4 billion a year earlier.

Capacity addition was 12% higher than a year earlier, helping India cut its carbon emission by a similar margin to 8.78 million tonnes, Tripathy said.

India reckons its renewable energy industry could generate business opportunities worth $ 160 billion in the next five years, making it a lucrative market that has already attracted big global players such as Sun Edison and First Solar.

Money has also started to flow in from China, and more deals are likely when Modi goes there on Thursday in his first visit to the bigger neighbour since taking office a year ago.