After securing a Euro 150 million Credit line for solar energy finance from a German financial institution, State Bank of India is in talks with European Investment Bank for about Euro 200 million to fund climate finance.
Last week the country’s largest lender obtained Euro 150 million in green funding from German government-owned KFW on soft terms and a long repayment period. SBI will use funds to finance solar energy projects.
This is the second loan from KFW to SBI as part of the solar partnership with India. Another loan for the same amount has already been disbursed.
Senior SBI executives said these are long-term lines with reasonable pricing. EIB is also keen to sign a credit line, which is currently going through legal due diligence.
For KFW credit assistance in solar energy, the bank has already tied up disbursals with entities that would use it. The solar power segment has matured now. The proposed funding arrangement with KFW will be more generic including electric vehicles, officials said.
The technologies and systems across renewable energy and climate themes are still evolving so the bank has to exercise caution in lending, he added.
India has set an ambitious goal of expanding solar energy eight fold in the coming years. Still, about 20 per cent of the Indian population is not connected to the electricity grid. The government is pushing ahead with electrification. Households already supplied with energy will also demand more power in the future, so a rapid increase in consumption is to be expected. This will also emit more greenhouse gases.