Germany’s Kfw, India’s SBI Ink EUR 150 million Pact for Solar Projects

A financing arrangement for 150 million EUROS (EUR) has been reached by Kreditanstalt für Wiederaufbau (KfW) and the State Bank of India (SBI) to fund solar projects in India.  Germany-based KfW finances investments and reform initiatives in a wide variety of sectors, including water supply, energy, and financial systems development.

For the German Federal Ministry for Economic Cooperation and Development (BMZ), KfW (Kreditanstalt für Wiederaufbau) is implementing solar cooperation with India to promote the development of solar energy. It has already provided EUR 150 million toward this objective and is currently committing another 150 million EUROS. These will be provided as loans to project developers through the SBI, according to the KfW official announcement.

India has set the audacious goal of doubling its use of solar energy over the next eight years. With a loan of EUR 150 million, KfW is pushing this on behalf of the German Federal Government. As part of the solar collaboration with India, this is already the second loan with the State Bank of India (SBI), the largest state bank in the country. The same amount of credit has already been successfully disbursed by another loan. Each year, the supported plants will generate more than 600,000-megawatt hours. Additionally, the actions will lower the annual rise in greenhouse gas emissions by 500,000 tonnes of CO2.

Innovative technologies, such as automated dry-cleaning solar modules that use less water, will be financed with the help of this financing. KfW maintains that it encourages the implementation of creative solutions, such as automatic dry cleaning systems at the solar park in Jaisalmer, Rajasthan. KfW (Kreditanstalt für Wiederaufbau) is also supporting the use of bifacial modules, which exploit radiation reflected from the ground in addition to absorbing solar energy from both sides, greatly increasing the electricity yield.

The KfW-supported solar farms will provide yearly energy generation sufficient to meet the needs of about 710,000 private Indian households. By employing renewable energy sources, it is possible to reduce the emissions of greenhouse gases and air pollutants that would have resulted from the production of power using fossil fuels. They aid in the reduction of thermal power plant construction or possibly their replacement. According to the announcement, the project helps develop the Indian economy in a way that is more environmentally friendly.

Finance Initiatives by KfW & SBI 

KfW has been partnering with India for several years in the areas of climate change, particularly in rural areas. In one such major initiative, At the same time, an amount of more than one billion euros is being provided in the support of green energy corridors- that connect solar, wind and hydropower plants to the electricity grid in India.

The State Bank of India, on the other hand, launched solar finance scheme Surya Shakti at the outset of 2022 to enable SME and business enterprises with the installation of solar rooftop / ground mounted grid-connected systems.