A first disbursement of USD 50 million marks the start of the implementation of the GCF solar rooftop programme in India. The trustee of the Green Climate Fund transferred the funds for the first GCF private sector project in the country to NABARD, which was converted into Indian Rupee and on-lent to TATA Cleantech Capital Limited.
GCF is investing USD 100 million to the USD 250 million programme which will provide access to long-term and affordable financing for the construction of 250 MW of solar rooftop capacity across India. The green electricity generated through this programme equals power consumption of almost 290,000 households in India, and is expected to reduce CO2 emissions by 5.2 million tonnes over the next 20 years. The GCF investment will be channeled through NABARD, the Fund's Accredited Entity and India's largest rural development bank. The project itself will be implemented by TATA Cleantech Capital Limited, the first private sector green bank from a developing country.
The Government of India has set a target of 40 GW of rooftop solar power by 2022 which will require substantial financial resources, estimated at USD 34 billion. However, the availability of long-term financing in the country is very limited due to high perceived risks and limited information on the track records of rooftop solar investments. The programme will tackle these market barriers by demonstrating the viability of solar rooftop projects and paving the way for future private sector financing in the currently unbanked sector.
“We are very excited to see that the solar rooftop programme in India is beginning to take shape. India has an immense untapped solar energy potential which is critical for the country's low-carbon and sustainable economic development,” said Ms. Ayaan Adam, Director of the Private Sector Facility at the Green Climate Fund. “In the long term, GCF investment will help create a viable economic model which will attract further private financing and boost the ambitious scale-up of solar rooftop capacity in India, but also in other developing countries.” she added.
Mr Manish Chourasia, Managing Director of Tata Cleantech Capital Limited said that the proposed USD 250 million rooftop program supported by GCF via USD 100 million long term line will play vital role in the development of the distributed solar sector in India by facilitating the flow of low cost long term funds for implementation of solar rooftop projects in industrial, commercial and residential segments. “This would not only improve power access but would also significantly reduce power cost to end consumers without increasing the carbon footprint” he added.
The programme supports India's ambitions to decarbonise the economy and meet its commitments under the Paris Agreement. India, which is currently the world's fourth-largest carbon emitter, has committed in its Nationally Determined Contribution (NDC) to generate at least 40% of electric power from non-fossil fuel sources by 2030, with solar energy playing a significant role.
Supporting climate mitigation efforts of developing countries is at the very core of the GCF mission. To this date, the Fund invested USD 2.2 billion to mitigation projects around the world, with an additional USD 1.6 billion for projects with both climate mitigation and adaptation elements.