The Asian Development Bank (ADB) has approved loans of $240.5 million to finance rooftop solar systems in India.

The financing will be provided to the State Bank of India (SBI) and the National Bank for Agriculture and Rural Development (NABARD) to offer loans to developers and end-users for installing rooftop solar systems across India.

ADB will allocate $90.5 million from its Clean Technology Fund (CTF) to SBI, while NABARD will receive $150 million, which includes $80 million from ADB’s ordinary capital resources and $70 million from the CTF.

This funding will support the second and third tranches of the Multi-tranche Financing Facility Solar Rooftop Investment Program, approved by ADB in 2016. The program was restructured in 2023 to focus on residential rooftop solar deployment.

“India aims to achieve about 50% of its cumulative electric power installed capacity from non-fossil fuel energy sources by 2030, aligning with its global commitments to reduce carbon emissions. ADB’s financing supports these goals and will contribute to Prime Minister Surya Ghar’s program, which encourages the installation of rooftop solar systems nationwide,” said Kaoru Ogino, ADB Principal Energy Specialist.

ADB has proposed several business models to scale up rooftop solar installations in India, citing the country’s underperformance in achieving its 2022 target of 40 GW, with only 8.3 GW installed. The proposed models aim to make rooftop solar installations more accessible and economically viable for a wider range of consumers.

ADB has also financed several of India’s clean energy projects in the past. In May this year, ADB approved a $148.5 million loan to enhance, upgrade, and climate-proof Sikkim’s electricity distribution system.

Last December, it loaned $200 million to enhance Uttarakhand’s electricity supply and enable the state’s transition to clean energy sources.

It also approved a loan of $250 million to strengthen India’s power sector. The funds were meant to enhance the financial performance of electricity distribution companies and enable an environment conducive to private sector investment.