Innovative Solar Energy Funding Program

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The majority of micro, small and medium enterprises (MSMEs) currently do not invest in solar rooftop solar power (SRT) due to limited credit availability, high financing costs and high collateral requirements. However, the potential of SRT in the MSME sector is estimated at around 16 GW and could make a significant contribution to achieving India's renewable energy and SRF targets by promoting environmentally friendly power generation. Investments in SRT are particularly beneficial for energy-intensive MSMEs to reduce electricity costs. To expand SRT lending to MSMEs, the financial bottlenecks need to be removed. A Credit Guarantee Facility (CGF) is an appropriate tool to overcome this financial obstacle by partially reducing the high credit risks for banks and thus facilitating access to loans for MSMEs to finance solar rooftop solar power. The main objective of the project is therefore to improve access to credit for SRT plants on MSMEs and thereby promote the development of MSMEs in the renewable energy sector. The medium to long-term objective is to improve the availability of data on lending to MSMEs and to support financial institutions in determining the pricing structure of loans based on real market behavior and thereby facilitate market development. Ultimately, the project also contributes to a broad-based ecologically sustainable and technically and economically efficient electricity supply in India.