Asian Development Bank signs loan agreement with India to support the development of renewable energy programs. Photo by Stephen Shaver/UPI | License Photo
NEW DELHI, Oct. 28 (UPI) -- India is getting the financial support it needs to help build a vibrant renewable energy industry, the Asian Development Bank announced.
"Lack of sufficient long-term debt financing for renewable energy projects in India is one of the major challenges to sustaining high levels of renewable energy deployment," S. Selvakumar, a finance minister in the Indian Department of Economic Affairs, said in a statement.
The Asian Development Bank signed a $200 million loan agreement with New Delhi to support clean energy programs. It's the first installment of a $500 million lending program for India. The development bank, which has headquarters in Manila, said the program would catalyze private sector investments in projects ranging from wind to biomass energy.
ADB funds would help finance as much as 50 percent of the initial costs of development.
"ADB's loan will help the government scale-up renewable energy infrastructure by facilitating investments in projects that will balance the objectives of growth, climate change, and energy security," M. Teresa Kho, country director for ADB in India, said.
U.S. President Barack Obama met in early 2015 with Indian Prime Minister Narendra Modi to discuss economic, energy and nuclear developments. Obama's visit followed the signing by U.S. Secretary of State John Kerry of billions of dollars worth of clean energy investments in the Indian economy at a New Deli investment conference.
During Kerry's visit, Indian conglomerate Adani Enterprises said it signed a $4 billion solar agreement with a U.S. solar energy services company SunEdison to produce enough solar panels to develop a sustainable green power sector in India.
Outside of a move to advance a low-carbon economy, the ADB has said the low price of crude oil is a silver lining for an importing nation like India.
The ADB said the slowdown in industrial economies is in part behind a lowered forecast for growth in the Indian economy. Gross domestic product for the current fiscal year, which ends March 2016, is expected at 7.4 percent, down from the bank's estimate in March of 7.8 percent. For fiscal year 2016, growth is forecast at 7.8 percent, down from the earlier GDP growth forecast of 8.2 percent.