Indian Prime Minister Narendra Modi and government are on a drive to extend electricity and power grid access nationwide, even to the least economically developed and most remote rural and Himalayan mountain communities. Off-grid solar energy microgrids have emerged as the most effective, and least polluting, means of doing so, thereby contributing to achieving both national greenhouse gas (GHG) reduction and sustainable development goals.
These and other public-private sector initiatives are opening up new, wide ranging business opportunities for both Indian and foreign renewable energy and clentech companies. On Nov. 3, the U.S. Agency for International Development (USAID) and Mumbai’s RBL Bank announced a new $75 million loan guarantee that will facilitate RBL lending small and medium-sized businesses (SMBs) the capital they need to install rooftop and off-grid solar PV systems.
Realizing India’s Renewable Energy and Sustainable Development Goals
It’s projected India will need to invest more than $100 billion a year until 2040 to meet growing demand for electricity, extend access to electricity nationwide by 2020 and realize the GHG reductions pledged as a party to the UN Paris climate change accord by 2030, USAID points out.
¨The U.S. government supports the Government of India’s goal of providing 24×7 power to all Indian households by 2020 and lowering of greenhouse gas (GHG) emissions by 2030. Today’s loan guarantee signing advances that goal by making finance accessible for companies that are providing energy access to communities not connected to India’s electricity grid,¨ the U.S. international development agency highlighted.
The RBL loan guarantee marks the first time USAID has partnered with a private sector Indian bank. According to RBL managing director and CEO Vishwavir Ajuja:
¨While India has abundant renewable energy, finance is a major barrier to develop clean, affordable and reliable energy. Our partnership with USAID will significantly reduce the gap between sustainable energy projects and financial resources for stakeholders with little or no access to financial sources as well as for entrepreneurs who are passionate about building clean energy.”
Breaking the Climate-Smart Finance Barrier
A provider of rural microgrids, OMC Power is one of the Indian clean energy SMBs keen to obtain a bank loan in order to expand its business. “This loan comes at a time when financing options for companies such as OMC are harder to come by.
¨It will allow us to expand our operations to rural areas in Uttar Pradesh that have never had access to energy in the past,” Rohit Chandra, OMC vice-chairman and executive director, was quoted as saying.
USAID is also the lead agency for President Barack Obama’s multilateral, public-private Power Africa program, which is experiencing unprecedented success extending safe, reliable and affordable emissions-free energy access in rural communities in sub-Saharan Africa by capitalizing on innovative mobile ¨pay-go¨ solar microgrid services.