United States Agency for international development (USAID) and US international development finance corporation (DFC) are jointly sponsoring loan portfolio guarantee to enable Indian small and medium enterprises (SMEs) to access reliable power and cut costs.
The loan worth 41 million dollars (about Rs 297 crore) will help finance investments by SMEs in renewable energy solutions, inclusion rooftop solar installations.
"USAID India is pleased to promote power diversification and support local businesses in India.
Investments in solar solutions secured by these credit guarantees will improve access to clean, steady and affordable energy as well as further progress towards India's clean energy transition and climate change mitigation," said Karen Klimowski, Acting Mission Director at USAID India.
India's commercial and industrial sectors pay high fees for making rooftop solar but SMEs and residential consumers face obstacles in securing the financing required to install and use them.
SMEs account for 48 per cent of total energy consumed in India's industrial sector. Rooftop solar power generation offers a win-win. Lower monthly energy costs drive important social benefits including job creation and economic growth while reducing carbon emissions and improving air quality.
USAID and DFC have partnered with New York-based Encourage Capital and two Indian non-banking financial compes, cKers Financial and Electronica Finance Ltd (EFL) to address this challenge.
Encourage Capital has invested 15 million dollars (Rs 108.72 crore) in EFL using USAID-DFC loan portfolio guarantee to stimulate the rooftop solar market -- representing a 9 billion dollars market opportunity for SMEs.
USAID will continue its support by providing technical assistance to address quality and safety concerns in the rooftop solar market. Once these credit guarantees lower the financial hurdle for installing rooftop solar, India will realise numerous benefits resulting from transition to this green technology.
These guarantees have the potential to unlock life-saving social benefits and robust economic growth.
( With inputs from ANI )
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor