ADB sanctions $240.5 million loan for rooftop solar systems in India

The Asian Development Bank (ADB) has sanctioned a $ 240,5 million loan to India to finance the expansion of the solar rooftop system in India. This is expected to push the ambitious government to promote and develop the rooftop solar system in the country and promote the renewable energy sector. 

ADB loan to be channelised through SBI and NABARD 

The ADB loan will be channelised through the State Bank of India (SBI) and the National Bank for Agriculture and Rural Development (NABARD). SBI and NABARD will use the ADB loan amount to provide loans to the developer of the rooftop solar system and to the people who want to install solar rooftop systems.

Out of the $240.5 million loan amount, SBI will receive $90.5 million, while NABARD will receive $150 million.

The latest sanctioned loan amount by the ADB is part of the Multitranche Financing Facility (MFF) Solar Rooftop Investment Program approved by the ADB in 2016.

In 2023, the programme was restructured to support the residential solar rooftop systems.

The government of India has launched the PM Surya Ghar Muft Bijli Yojana to promote the adoption of solar rooftop systems in India.

PM Surya Ghar Muft Bijli Yojana

Prime Minister Narendra Modi launched the  PM Surya Ghar Muft Bijli Yojana on 13 February 2024. 

The scheme encourages people to install solar power units on their house roofs. In return, they will receive 300 units of electricity generated from the installed solar unit free of charge per month.

The scheme aims to target one crore households across the country. 

The allocated amount for the scheme is Rs 75,021 crore.   

Features of the Scheme 

• A subsidy is provided to the household for installing the rooftop solar units.
• For solar units up to 2KW capacity, a subsidy of 60% of the solar unit cost is provided and 40% of additional system cost for systems between 2 to 3 KW capacity. 
• Financing facilities are provided to the individuals by the banks and other financial institutions.

About the Asian Development Bank 

The Asian Development Bank is a regional multilateral institution focused on the  Asia-Pacific region. 

The bank provides loans and grants to member countries or invests in regional companies to promote social and economic development.

Foundation: 19 December, 1966

Members: 68 members

Headquarters: Mandaluyong City, Metro Manila, Philippines.

President : Masatsugu Asakawa (Citizen of Japan).