India takes serious steps to meet its 100 GW solar expansion target in the next six to seven years (by 2022).
The solar power generation capacity in India must be increased roughly 17 times compared with the today’s capacity, and to meet this target, the country hopes to receive a loan of $500 million from the Asian Infrastructure Investment Bank (AIIB), which is led by China.
[adsense float=”left”]As we already know, both China and India need massive, but cheap energy sources to develop their expanding economies to a level that is comparable with the economies of the western countries, and to achieve this goal they burn every year a large amount of coal that produces cheap energy, but also pollutes the air and the soil in their countries.
AIIB plans to join the global initiative toward the development of green projects, so they could fund eco-friendly investment projects like the one proposed by India, especially to avoid allegations that they are promoting fossil fuel projects.
China is the largest shareholder in the bank, but India is the second shareholder, so it has pretty good chances to get this loan that can support prime minister Narendra Modi’s plan to increase solar capacity in India to 100 GW by 2022.
The Ministry of New and Renewable Energy in India expects to receive the first funds from the loan in the next six months.
The interest on the loan is likely to be around 2-2.5%, but by now, the bank has not made any comments on the loan, instead it stated that plans to develop pipeline projects in several countries.
India is also in talks with other banks like the Asian Development Bank, the World Bank, Germany’s KfW and also the New Development Bank.
India has already requested $500m from the Asian Development Bank to support the development of rooftop solar in the country, and about the same amount of money to expand transmission networks that connect to solar parks.
The Asian Development Bank (ADB), signed a cooperation agreement with the US Agency for International Development (USAID) to back the solar power expansion.
To meet the target of 100 GW solar capacity, India needs to invest roughly $100 billion in solar power development by 2022.
Tarun Kapur, joint secretary at the Ministry of New and Renewable Energy in India stated that financing is not an issue, but they seek to get cheaper funds.
It is very possible to see that the AIIB will lend about $10 to $15 billion per year in the first five or six years, and these operations could start in the second quarter of this year.
Jin Liqun, the president of AIIB, started early this year that the bank has a good pipeline of co-financing projects and standalone projects scheduled for this year.