USAID announces $75 Million in loan Guarantee for off-grid solar in India

The U.S. Agency for International Development (USAID) and Mumbai-based RBL Bank announced today a new loan portfolio guarantee that will facilitate up to $75 million for lending to small and medium enterprises (SMEs) operating in off-grid, solar rooftops, and energy efficiency sectors. This guarantee, the first of its kind between USAID and an Indian private sector bank, will support innovative solutions and business models to improve access to clean energy sources for electricity.

India needs more than $100 billion in energy investment per year until 2040 to meet its need for electricity. The U.S. Government supports the Government of India’s goal of providing 24×7 power to all Indian households by 2020 and lowering of greenhouse gas (GHG) emissions by 2030. Today’s loan guarantee signing advances that goal by making finance accessible for companies that are providing energy access to communities not connected to India’s electricity grid.

USAID Mission Director to India, Ambassador Jonathan Addleton, hosted RBL for the official partnership signing ceremony noting that “USAID is excited to partner with such a forward-looking institution as RBL Bank to achieve our shared vision of bringing clean energy access to all Indians. USAID will continue to support clean energy finance efforts in support of India’s transition to a high-performing, low-emission, energy-secure economy.”

Managing Director & CEO, RBL Bank, Mr. Vishwavir Ahuja, commended the agreement, saying, “We are proud to be the first Indian private sector bank to sign this guarantee with USAID. While India has abundant renewable energy, finance is a major barrier to develop clean, affordable and reliable energy. Our partnership with USAID will significantly reduce the gap between sustainable energy projects and financial resources for stakeholders with little or no access to financial sources as well as for entrepreneurs who are passionate about building clean energy.”

Also present at the event was rural micro-grid company OMC Power, which hopes to be one of the first companies to access a loan under the guarantee. Vice-Chairman and Executive Director, OMC Power, Mr. Rohit Chandra, celebrated the signing saying, “This loan comes at a time when financing options for companies such as OMC are harder to come by. It will allow us to expand our operations to rural areas in Uttar Pradesh that have never had access to energy in the past.”