Germany enters into partnership with India on solar power for Rs. 7500 cr

"Today, a landmark Memorandum of Understanding was signed by representatives of the two Governments; Mr Piyush Goyal, Minister of State with Independent Charge for Power, Coal and New & Renewable Energy in the Government of India and German Development Minister Mr. Gerd Müller, establishing the Indo-German Solar Partnership. Renewable energy is a major focus of bilateral cooperation and both countries share the vision to extend their role in the national energy mix. Through this partnership, the Government of Germany envisages to extend concessional loans to India in the range of Euro 1 billion (INR 7500 crore) over the next 5 years through KfW Development Bank (KfW). The loans will be accompanied by capacity building measures of GIZ – KfW’s development sister organization in technical cooperation," read a statement issues by German authorities.

The partnership is envisaged to be built upon three pillars of implementation, with the major pillar being (i) cooperation in the field of solar rooftops, read the statement.

The other two pillars shall be (ii) the development of solar parks or solar zones and (iii) solar off-grid applications to improve the access to clean and sustainable energy, it said.

The Indian Renewable Energy Development Agency Limited (IREDA) and KfW signed an agreement today for financial assistance of EUR 100 million (INR 750 crore) for promotion of Green Power. IREDA will deploy the loan to support Solar PV projects (including grid interactive, open access, viability gap funding and rooftop systems) and renewable energy projects in regions with currently limited use of their renewable energy potential. The financing conditions of loans for solar-rooftop installations shall follow “IREDA’s Loan Scheme for Rooftop Solar PV Power Projects”.

KFW’s Director General Europe and Asia, Roland Siller emphasized: “This is a great day for India and our Renewable Energy cooperation, committing a new loan on the day of our country leaders entering into the Solar Partnership. “The loan agreement signed today is KfW 5th line of credit to IREDA for promoting renewable energy projects in India. IREDA has successfully utilized 3 lines of credits worth EUR 131 million and is currently drawing from the ongoing 4th line of credit worth EUR 200 Million. KfW and IREDA have been cooperating with each other since 1999.  Roland Siller, Director General Europe and Asia of KFW commented, “IREDA is our most trusted and longstanding partner in Renewable Energy. We are looking at IREDA as a major partner in the implementation of the Indo-German Solar Partnership, with MNRE as the political driving force behind it.”

Supporting the expansion plans for renewable energy generation, the Indian government set up “Green Energy Corridors” (GEC) for transmission infrastructure to effectively manage a larger share of renewables in the power mix. Today, two more loan agreements totaling Euro 125 million were signed with the Government of India for financing the intrastate transmission infrastructure in the states of Andhra Pradesh and Himachal Pradesh. The EUR 68 million (approx. INR 500 crore) to APTRANSCO and EUR 57 million (approx. INR 420 crore) to HPPTCL will evacuate the additional wind and hydro power planned in the two states These loans will finance the new switchgear substations, power systems and transmission lines especially for transporting renewable energy in India.

In 2013, the German Federal Government had expressed its willingness to provide up to EUR 1 billion for financing “Green Energy Corridors” to ensure that renewable energies play a significant role in this growth. In this context, KfW under the Financial Cooperation (FC) with India has put together one of the biggest loan packages in its history to finance the “Green Energy Corridors”. Last year, three loan agreements totaling Euro 625 million for financing the Green Energy Corridors (GEC) in India had been signed and with these new loans, the total financing by KfW on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) for the Green Energy Corridor project reaches Euro 750 million.