World Bank and Power Grid Corporation of India discuss financial support

Loan talks still at an early stage with figure of $500 million apparently discussed.

Discussions have taken place between the World Bank and the Power Grid Corporation of India regarding financial support.

The Economic Times reports an anonymous source close to the grid company. That source says that the World Bank has expressed its interest in giving the loan, that the talks were at an initial stage, and that it was expected to be finalised in three to four months. According to the source, the value of the loan is likely to be $500 million and is to fund the building six or seven solar projects with a total capacity of 7,000 MW. 

A World Bank spokesperson, when contacted for comment, said, “There are discussions on this project but there has been no formal request yet for World Bank support.”

The Economic Times’s anonymous source said that the loan will have a moratorium of five years with repayment due in fifteen years. The rate of interest, apparently, will be around the same ‘at which the World Bank lends to developing countries’.

India’s renewable energy potential has been evident for some time. Writing in January, Jasmeet Khurana of Bridge to India said that the country planned to ‘significantly ramp up its renewable power capacity in the years to come’. 

Furthermore, said Khurana, “With India poised to be one of the leaders in the growth of new power capacity in the coming decades, clearly, it seems to be the time to consider investing in India‘s future of renewables and energy storage.”

India’s ambitions in the solar market may outstrip the country’s supply ability, however. It was reported by pv magazine yesterday that the Union Government's plan to install 100 GW of capacity includes an unofficial commitment to sourcing just a quarter of its modules from domestic suppliers. That commitment, said Tata Power Solar CEO Ajay Goel, was largely down to the manufacturer’s agreeing to withdraw the anti-dumping petition. Said Goel, "When we and other domestic manufacturers agreed to withdraw the anti-dumping petition, it was on the understanding the government would make a commitment to the domestic market in return.

"We think that will be around 25%. That number may go up or down, and I don‘t think we will get a formal commitment to a fixed amount but we don‘t expect the government to backtrack on that understanding."

(This news story is from PV Magazine)