An estimated 13 percent of Indian households and a significant share of the country’s small businesses are not connected to an electricity grid and either live without power or rely on off-grid solutions like solar lanterns. While the country has set aggressive targets for expanding the share of electricity it generates from renewable resources, reaching these off-grid communities will require increased investment in reliable distributed solutions such as rooftop solar.
Solution and Impact
A loan guaranty from USAID and DFC will mobilize up to $41.7 million for loans to micro, small and medium enterprises in India that are investing in or providing distributed renewable energy products such as rooftop solar, mini-grids, solar pumps, and other energy efficiency solutions. Because small and medium-sized enterprises in India account for almost half of all the energy consumed in the country’s industrial sector, the project has the potential to significantly expand access to reliable sources of clean and affordable power, while also reducing emissions.
The loan guaranty will support lending from cKers Finance Private Limited and Electronica Finance Limited, two non-bank financial institutions in India that are investing in renewable energy solutions, filling a major financing gap that will significantly expand access.