fbpx 49419-002: Solar Rooftop Investment Program - Tranche 1 | Asian Development Bank

India: Solar Rooftop Investment Program - Tranche 1

Sovereign (Public) Project | 49419-002 Status: Active

The tranche 1 is a $100 million financial intermediation loan inclusive of a capacity development technical assistance (estimated utilization of the TA during tranche 1 is $2 million). As requested by the Government of India, Punjab National Bank is the borrower, and the India is providing a sovereign guarantee to the Asian Development Bank for the SRIP. The SRIP intends to primarily finance large solar rooftop systems on industrial and commercial buildings on standalone or aggregated basis. Punjab National Bank's loans to subborrowers will be priced based on Punjab National Bank's cost of funds and subproject-specific risks. The accompanying technical assistance for $5 million is critical to integrate the building blocks of the Government of India's sector development initiative to ensure a viable market demand, by strengthening (i) Punjab National Bank's institutional capacity, and (ii) certain market development elements.

Project Details

Project Officer
Bhatt, Jigar Arvindbhai South Asia Department Request for information
Country
  • India
Modality
  • Loan
Sector
  • Finance
 
Project Name Solar Rooftop Investment Program - Tranche 1
Project Number 49419-002
Country India
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 8309-IND: Solar Rooftop Investment Program - Tranche 1
Clean Technology Fund US$ 100.00 million
Loan: Solar Rooftop Investment Program - Tranche 1
World Bank (IBRD) US$ 647.90 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Finance / Finance sector development

Gender Equity and Mainstreaming No gender elements
Description The tranche 1 is a $100 million financial intermediation loan inclusive of a capacity development technical assistance (estimated utilization of the TA during tranche 1 is $2 million). As requested by the Government of India, Punjab National Bank is the borrower, and the India is providing a sovereign guarantee to the Asian Development Bank for the SRIP. The SRIP intends to primarily finance large solar rooftop systems on industrial and commercial buildings on standalone or aggregated basis. Punjab National Bank's loans to subborrowers will be priced based on Punjab National Bank's cost of funds and subproject-specific risks. The accompanying technical assistance for $5 million is critical to integrate the building blocks of the Government of India's sector development initiative to ensure a viable market demand, by strengthening (i) Punjab National Bank's institutional capacity, and (ii) certain market development elements. SRIP's value addition, inclusive of $330 million from ordinary capital resources and $170 million from Clean Technology Fund, is to facilitate India's transition to a low carbon economy and therefore contribute to the climate change goal of reducing greenhouse gas emissions by 441,700 tons of carbon dioxide equivalent annually, or about 11 million tons of carbon dioxide equivalent over the typical 25-year lifetime of rooftop solar systems.
Project Rationale and Linkage to Country/Regional Strategy The Government of India (government) plans to expand the country's solar rooftop capacity by 40 gigawatts (GW) by 2022. To fuel India's economic growth, its power system will have to expand rapidly over the next decade. This is also to maintain national energy security and expand energy access to all people in India. To ensure environmental sustainability, the government places a high priority on renewable energy development. India's National Action Plan on Climate Change (prepared in 2008) outlines existing and future policies and programs addressing climate mitigation and adaptation. Under the plan, the government launched the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010 to add 20 GW of grid connected solar energy by 2022. On 17 July 2015, the Union Cabinet approved a revised JNNSM proposal to increase the original 20 GW solar energy target to 100 GW by 2022, including 40 GW of rooftop solar energy generation. The proposed Solar Rooftop Investment Program would therefore (i) establish a solar rooftop financing facility at Punjab National Bank to provide dedicated debt financing to help India meet its 40 GW solar rooftop capacity target by 2022; and (ii) provide associated institutional capacity and market development support, leading to a pipeline of bankable subprojects.
Impact Energy security provided to all in an environmentally sustainable manner, and renewable energy developed
Project Outcome
Description of Outcome Solar rooftop capacity in India increased.
Progress Toward Outcome 20 subprojects of 104.59 MW capacity for US$63.86 million to be funded by ADB have been sanctioned/under sanction. Further 25 subprojects of $7.5 million (3.5 MW) with 50% ADB funding have been sanctioned and disbursed by PNB.
Implementation Progress
Description of Project Outputs

Debt funding to the solar rooftop sector increased.

PNB institutional capacity Improved.

Solar rooftop market infrastructure and bankable subproject pipeline developed.

Status of Implementation Progress (Outputs, Activities, and Issues)

1) 20 subprojects of 104.59 MW capacity for US$63.86 million to be funded by ADB have been sanctioned/under sanction. Further 25 subprojects of $7.5 million (3.5 MW) with 50% ADB funding have been sanctioned and disbursed by PNB.

2) PNB has setup PMU at its Headquarters. The PMU is supported by consultants from ADB. One nodal officer at each zonal office has also been identified to look after the marketing needs on the command area of circle offices and facilitate timely sanction of credit needs.

3) PNB has conducted Awareness programs along with ADB team for State Nodal Agencies/DISCOMs at Karnataka, Tamil Nadu and Goa (out of 7 states/UTs allocated to PNB-ADB).

PNB has conducted sensitization program in 16 states for potential customers, as well as field functionaries at more than 10 Zonal headquarters.

Advertisements in state level/regional newspapers across 16 states have been published.

PNB is also working to conduct similar awareness programs for women entrepreneurs at selected centers.

5 exclusive training programs were organised for training of development officers at controlling offices of branches, marketing officers at zonal/circle offices, trainers, etc. to equip them with requisite skills for appraisal of rooftop solar generation-based business model (CAPEX/RESCO).

The financing scheme has been uploaded on PNB and MNRE websites.

Geographical Location Nation-wide
Safeguard Categories
Environment FI-C
Involuntary Resettlement FI-C
Indigenous Peoples FI-C
Summary of Environmental and Social Aspects
Environmental Aspects Categorized as FI, treated as C. No separate environment and social management system is required.
Involuntary Resettlement Categorized as FI, treated as C. No separate environment and social management system is required.
Indigenous Peoples Categorized as FI, treated as C. No separate environment and social management system is required.
Stakeholder Communication, Participation, and Consultation
During Project Design Extensive due diligence and consultation have been conducted.
During Project Implementation Due diligence and consultation is under progress.
Business Opportunities
Consulting Services Recruitment of consulting services would be carried out under the capacity development component of Technical Assistance. The consultants would be engaged in accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).
Procurement All procurement to be financed under the multitranche financing facility would be carried out in accordance with Asian Development Bank (ADB)'s Procurement Guidelines (2015, as amended from time to time), following stated eligibility criteria. ADB encourages Punjab National Bank to require its subborrowers to adopt internationally competitive bidding procedures to the extent possible when the amount of the investment is unusually large and economy and efficiency can be gained through such procedures. For procurement of goods and services to be financed by subloans from the ADB loan, Punjab National Bank would ensure that prices are reasonable and that relevant factors, e.g., time of delivery, efficiency, reliability, suitability for the subproject, and (for consulting services) quality and competence are taken into account. Solar panels procured under the India domestic content requirement would not be eligible for financing under the Solar Rooftop Investment Program. ADB loan proceeds would be disbursed in accordance with ADB's Loan Disbursement Handbook (2015, as amended from time to time). ADB may provide Punjab National Bank with United States dollars as the currency of payment.
Responsible ADB Officer Bhatt, Jigar Arvindbhai
Responsible ADB Department South Asia Department
Responsible ADB Division India Resident Mission
Executing Agencies
Punjab National Bank
7, Bhikhaiji Cama Place
Timetable
Concept Clearance -
Fact Finding -
MRM 20 Jul 2016
Approval 07 Oct 2016
Last Review Mission -
Last PDS Update 24 Sep 2018

Loan 8309-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Oct 2016 30 May 2017 24 Aug 2017 30 Jun 2023 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 200.00 Cumulative Contract Awards
ADB 0.00 07 Oct 2016 0.00 0.00 0%
Counterpart 100.00 Cumulative Disbursements
Cofinancing 100.00 07 Oct 2016 0.00 25.00 25%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.