The World Bank Group today signed an agreement with the International Solar Alliance (ISA), consisting of 121 countries led by India, to collaborate on increasing solar energy use around the world, with the goal of mobilizing $1 trillion in investments by 2030.
The agreement signed in the presence of Finance Minister Arun Jaitley, Union Minister of State with Independent charge for Power, Coal, New and Renewable Energy Piyush Goyal and World Bank Group President Jim Yong Kim establishes the World Bank Group as a financial partner for the ISA and sees the institution as using its global development network, global knowledge and financing capacity to promote the use of solar energy.
The World Bank also announced that it planned to provide more than $1 billion to support India’s ambitious initiatives to expand solar through investments in solar generation. The World Bank-supported projects under preparation include solar rooftop technology, infrastructure for solar parks, bringing innovative solar and hybrid technologies to market, and transmission lines for solar-rich states. These solar investments for India combined would be the Bank’s largest financing of solar for any country in the world to date.
“India’s plans to virtually triple the share of renewable energy by 2030 will both transform the country’s energy supply and have far-reaching global implications in the fight against climate change,” said World Bank Group President Jim Yong Kim. “Prime Minister Modi’s personal commitment toward renewable energy, particularly solar, is the driving force behind these investments. The World Bank Group will do all it can to help India meet its ambitious targets, especially around scaling up solar energy.”
Kim said he also hoped the signing of the agreement with the ISA would help mobilize a global movement toward a climate-friendly future.
As part of the agreement, the Bank Group will develop a roadmap to mobilize financing for development and deployment of affordable solar energy, and work with other multilateral development banks and financial institutions to develop financing instruments to support solar energy development.
In keeping with the Bank’s commitment to support India’s solar energy program, the Government of India and the World Bank today signed an agreement for the $625 million Grid Connected Rooftop Solar Program. The project will finance the installation of at least 400 MW of solar Photovoltaic (PV) installations that will provide clean, renewable energy, and reduce greenhouse gas emissions by displacing thermal generation. The development of a $200 million Shared Infrastructure for Solar Parks Project under a public-private partnership model is also under preparation. The Bank’s support for India’s solar projects will increase the availability of financing, introduce new technologies, build capacity for solar rooftop units and enable the development of common infrastructure, which will support privately developed solar parks in a number of states across India.
International Finance Corporation (IFC), the Bank Group’s private sector arm, was one of the earliest financiers of wind and solar projects in India, and in fact helped develop the country’s first grid-connected solar power project. IFC is also supporting the government of Madhya Pradesh to set up the 750-MW Rewa ultra-mega solar power project, which will be the largest single-site solar power project in the world.
The ISA was launched at the UN Climate Change Conference in Paris on 30 November by Indian Prime Minister Narendra Modi and French President Francois Hollande.
India is the largest client of the World Bank Group. Between 2015 and 2016, the Group lent around $4.8 billion to India. This includes $2.8 billion from the International Bank for Reconstruction and Development (IBRD), $1.0 billion from the International Development Association (IDA) and approximately $1.0 billion in investments from the International Finance Corporation (IFC). As of June 2016, total IBRD and IDA net commitments stood at $27 billion (IBRD $16 billion, IDA $11 billion) across 95 projects. At the end of May 2016, IFC’s India portfolio contained 248 projects, amounting to a committed and disbursed exposure of approximately $4.4 billion.