The World Bank is keen to financially support India’s efforts to emerge as a global leader in solar power, its Country Director for India Onno Ruhl has said.
For India to achieve its target of adding 20,000 MW of solar capacity by 2022, there is a need to address key issues such as structural constraints to commercial financing, Ruhl told reporters here.
The World Bank on Thursday launched a report titled ‘Paving the Way for a Transformational Future: Lessons from Jawaharlal Nehru National Solar Mission Phase 1”.
India should take a serious look at subordinated debt financing to provide long-term finance for solar power projects, said Ashish Khanna, Lead Energy Specialist, World Bank.
One of the constraints is that the Indian banking system is unable to provide long-term funding for large infrastructure projects. Financial innovations such as credit enhancement, and subordinate debt lending should be looked into for addressing this issue, Khanna said.
No bank help
Under Phase-I of India’s National Solar Mission, financing for projects mainly came from export credit agencies, multilateral financial institutions and some non-banking financial companies, and not from scheduled commercial banks. “Government needs to design risk reducing financing instruments such as sub-ordinated public finance in order to attract long-term commercial lending to ensure long-term viability,” the report says.
The installation of grid-connected solar power is a continuing process, and so far, 2,101 MW capacity has been installed, according to the Ministry for New & Renewable Energy.
‘No plan to revise GDP growth forecast’
World Bank has no immediate plan to revise its recent India GDP growth outlook for 2013-14, India head Onno Ruhl has said.
“India’s second-quarter GDP growth (4.8 per cent) was encouraging. So we are going to stick as of now to our recent growth forecast”, the World Bank official told Business Line.
In October this year, World Bank had revised downwards itsgrowth forecast for the current fiscal to 4.7 per cent.
This was against the 6.1 per cent GDP growth projected in April.
India’s economic growth is, however, expected to accelerate to 6.2 per cent in 2014-15, the World Bank had projected in its India development update released in October.