PM Muft Bijli Yojana: Big Boost For Solar Scheme, World Bank Approves $890 Million Funding
The World Bank’s Board of Executive Directors has approved a $890 million financing package to support India’s rooftop solar programme. The funding aims to help more people install rooftop solar systems and reduce their electricity bills.
The package includes an $820 million loan from the International Bank for Reconstruction and Development (IBRD), a $60 million concessional loan from the Clean Technology Fund, and a $10 million grant from the IBRD’s Livable Planet Fund.
India has committed to achieving net zero by 2070 and increasing non-fossil-fuel-based energy resources to 60 percent of its electricity mix by 2035.
World Bank to Mobilise $4.2 Billion in Private Financing
The World Bank also plans to mobilise an estimated $4.2 billion in private financing through commercial loans. This funding will help households get financial support for installing rooftop solar systems.
The programme is expected to reduce financial barriers and make rooftop solar systems more affordable for families across India.
Funding to Support PM Surya Ghar Muft Bijli Yojana
The financing will support the Central Government’s PM Surya Ghar: Muft Bijli Yojana. The scheme aims to install rooftop solar systems in 10 million households in rural and urban areas.
The programme is designed to reduce household electricity bills and increase the domestic manufacturing of rooftop solar equipment.
Programme Expected to Create 1.7 Million Jobs
According to the World Bank, the rooftop solar programme could create around 1.7 million jobs.
These employment opportunities are expected to be generated in renewable energy manufacturing, solar system installation and other related services.
India Targets Net-Zero Emissions by 2070
India has committed to achieving net-zero emissions by 2070. The country also aims to increase the share of non-fossil fuel sources in its electricity mix to 60% by 2035.
India’s large-scale solar power capacity has grown rapidly over the last decade. However, the adoption of rooftop solar systems by residential consumers has remained relatively low.
World Bank Has Supported India’s Solar Sector for Over a Decade
Paul Procee, Acting Country Director for India at the World Bank, said the organisation has supported India’s rooftop solar sector for more than a decade.
According to him, the World Bank has mobilised more than $2 billion to help India’s rooftop solar market grow from around 500 MW to over 27 GW of installed capacity.
He said the latest financing will help India expand residential rooftop solar and create new job opportunities across the solar equipment supply chain and installation sector.
Collateral-Free Financing to Help Households Install Solar
The World Bank said the programme will focus on removing financial barriers to rooftop solar adoption. It will also strengthen the capacity of electricity distribution companies, banks and solar vendors to provide better services.
Moez Cherif, Task Team Leader for the programme, said collateral-free financing will allow households to install solar power systems and significantly reduce their monthly electricity bills.
World Bank’s Previous Support for Rooftop Solar in India
In 2016, the World Bank approved a $648 million financing package for the Grid-Connected Rooftop Solar Programme. The programme mainly focused on commercial and industrial consumers.
In 2022, the World Bank approved an additional $165 million in financing to expand support for residential rooftop solar systems.
According to the World Bank, its financial support has helped India’s installed rooftop solar capacity increase from around 500 MW to more than 27 GW.
