German state-owned development bank KfW will lend EUR 200 million (USD 228m) to India so as to help the country provide low-interest loans for around 200-MW of new renewable energy capacity.
The bank has signed a credit line agreement with India’s Rural Electrification Corporate Ltd (REC), which plans to back solar and wind power projects, the lender announced this week. The specific loans will be supplemented by counterpart contributions of up to 30% from the borrowers and contributions from other lenders. The provided financing will target projects in the private sector and will support 200 MW of renewables. The new capacity, seen to meet the demand of about 270,000 homes, will help offset up to 285,000 tonnes of carbon dioxide (CO2) emissions annually.
“KfW’s financing to promote the increased use of renewables will make an important contribution to slowing the rise in greenhouse gas emissions and reducing the deficit in the power supply,” said Joachim Nagel, member of the KfW Group executive board.
Additionally, REC will get a EUR-1-million grant from KfW to improve standards in the Indian energy sector, the German lender said.
India’s goal is to have 175 GW of installed renewables capacity by 2022 and account for 50% of its total power generation. The target for solar and wind is 100 GW and 60 GW, respectively.
(EUR 1.0 = USD 1.138)
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