World Bank to double clean energy lending

The World Bank and its associate body, the International Finance Corporation (IFC), will double loans given to renewable energy projects to $2 billion (Rs9,103 crore) in the next three years, a senior official from the World Bank said here on Tuesday.

The lending will primarily be for power generation and energy efficiency projects.

The World Bank largely funds government projects while the IFC caters to the private sector.

Ashish Khanna, senior energy specialist, South Asia Sustainable Development, World Bank, said that in the short run, biomass and small hydro projects will be most viable in the green energy space.

“Later on, big hydro and solar projects can also help in a big way. Solar technologies will first stabilise in urban areas and then move to villages,” he added.

Small hydro projects are those  with a capacity of up to 25 megawatt (mw).

One of the first renewable energy projects the World Bank funded was the 1,500 mw Nathpa-Jhakri hydro project in Himachal Pradesh.

The project has been developed by state-run Sutluj Jal Vidyut Nigam (SJVNL).

Khanna also said the two international funding bodies were in talks with the government for an initiative to fund and assist financial institutions in setting up arms dedicated to renewable energy sector lending.

“They are more comfortable funding one big project than, say, 100 small projects,” he stated.

The government has been setting ambitious targets for renewable energy capacity addition, especially solar power.

Though green energy currently accounts for just over 10% of India’s total installed capacity of about 1,60,000 mw—and just 4% of actual power generated—the government plans to take it to 72,400 mw by 2022.

Similarly, the government, under the Jawaharlal Nehru National Solar Mission, aims to add a solar capacity of 1,300 mw in the next three years and reach 20,000 mw by 2022, from the current capacity of less than 50 mw.

Khanna said the World Bank’s loans outstanding to the overall power sector in the country are at $3.4 billion and the IFC’s at about $1 billion.

“We (the World Bank) are looking at (funding) conventional energy projects of $1.5-2 billion in the next three years,” he noted.