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USAID, DFC announces USD 41 Million for financing Renewable Energy solutions in India

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USAID, DFC announce USD 41 mn financing for renewable energy in IndiaUnited States Agency for International Development (USAID) & US International Development Finance Corporation (DFC) has announced a USD 41 Million (~ INR 297 Crore) Joint Loan Portfolio guarantee program for financing investments in renewable energy solutions including rooftop solar installations by Indian Small and medium-sized enterprises (SMEs).

  • Objective – To address the Financial hurdles facing rooftop solar project installations in India. It will benefit SMEs & residential consumers for securing finances needed for installing and using rooftop panels.
  • At present,  SMEs account for 48% of total energy consumed in India’s industrial sector.  Installing Rooftop solar power will enable SMEs to get access to reliable power & will also reduce their electricity costs.
  • The transition will also further progress towards India’s clean energy transition &  climate change mitigation.
  • USAID will also provide technical assistance for addressing the quality and safety concerns in the rooftop solar market.

Partner Agencies

USAID & DFC have partnered with US-based Encourage Capital & 2 Indian NBFCs (Non-Banking Financial Companies) namely  – ‘cKers Financial’ & women-owned ‘Electronica Finance Limited (EFL)’ for addressing the challenge of financing Rooftop Solar projects.

  • Encourage Capital has invested USD 15 Million (INR 108.72 Crore) in EFL using the USAID-DFC loan portfolio guarantee for boosting the rooftop solar market in India.
  • The rooftop solar market represents a USD 9 Billion market opportunity for SMEs.

Key Points

  • India’s commercial and industrial sectors pay high fees as electricity bills which makes rooftop solar a cost-saving investment.
  • Rooftop Solar Power Generation will help in boosting job creation & economic growth & also reduce carbon emissions & improving air quality.

India’s Targets:

  • India has set a target to install 175 GW of renewable energy capacity by the year 2022, which includes 100 GW from Solar, 60 GW from Wind, 10 GW from Bio-power & 5 GW from small hydro-power.
  • The government aims to achieve 40 GW renewable energy capacity by 2022 through the installation of rooftop solar projects.
  • Of the 40 GW, 4 GW to come from the domestic solar rooftop, whereas 16GW potential can be harnessed from MSMEs.

Recent Related News:

i.On November 19, 2020, Mastercard and USAID entered into a partnership under the Women’s Global Development and Prosperity Initiative (W-GDP) Initiative to launch Project Kirana.

About the United States Agency for International Development (USAID):

Acting Administrator – Gloria D. Steele
Headquarters – Washington D.C., USA

About  US International Development Finance Corporation (DFC):

Acting CEO – Dev Jagadesan
Headquarters – Washington D.C., USA