India’s rooftop solar expansion plan received a $197.67 million guarantee from the World Bank Group’s guarantee arm. The guarantee supports the refinancing of a $500 million World Bank loan to the State Bank of India for grid-connected solar systems serving commercial and industrial users. The Multilateral Investment Guarantee Agency (MIGA) issued the guarantee to Citibank N.A. for its non-shareholder loan to SBI.
The rooftop solar installations aim to provide clean energy and reduce greenhouse gas emissions by displacing more expensive and carbon-intensive thermal generation. The loan funds a national program delivering grid-connected rooftop solar photovoltaic (GRPV) systems to commercial and industrial customers across India. “MIGA’s guarantee will support SBI’s growing portfolio of renewable energy in India and contribute to India’s climate goals,” said Tsutomu Yamamoto, MIGA Managing Director.
India has set ambitious plans for a clean energy transition, with investment needs estimated between $160 billion and $300 billion annually to reach net zero by 2070. SBI, one of India’s largest banking and financial services institutions, has been tasked to facilitate at least 7.5 percent of its domestic gross advances as “green” financing. SBI initiated the rooftop solar project in 2016, leveraging World Bank financing and technical assistance to showcase the commercial viability of rooftop solar for commercial and industrial segments.
The World Bank program aided SBI in attracting international commercial lenders and private finance, resulting in 1,004 MW of GRPV installations under the program. Citibank played a crucial role as the sole lender, mandated lead arranger, facility agent, and MIGA coordinator for the financing. Stephanie von Friedeburg, Global Head of Citi’s Public Sector Group, emphasized the significance of the transaction in supporting India’s rooftop solar program and fostering sustainable development.
Rana Ashutosh Kumar Singh, Managing Director of SBI, hailed the refinancing as a “pioneering transaction” that aligns with India’s Net Zero ambitions and sustainable development goals. The financing is expected to help SBI reduce borrowing costs, diversify funding sources, and contribute to reducing the nation’s carbon footprint. MIGA highlighted that the guarantee also creates room for additional World Bank lending to the government of India by transferring the loan to commercial lenders’ balance sheets.
SBI, serving over 480 million customers through numerous retail branches in India and offices in 29 countries, was established in 1921 as the Imperial Bank of India and later constituted as the State Bank of India in 1951. MIGA, a part of the World Bank Group, offers political risk insurance and credit enhancement to mobilize private capital into developing countries. The World Bank Group aims to boost annual guarantee issuance to $20 billion by 2030 through MIGA.
