he World Bank’s Board of Executive Directors has greenlit an $890 million financing package to accelerate the expansion of India’s national rooftop solar programme, enabling solar system installations for millions of domestic households across the country.
The funding is designed to bolster India’s flagship initiative PM Surya Ghar: Muft Bijli Yojana (PMSMGBY), which targets rooftop solar coverage for 10 million rural and urban households. The programme is committed to lowering residential electricity costs and strengthening India’s domestic solar manufacturing industry, advancing the country’s clean energy transition goals.
The comprehensive financing package consists of three parts: an $820 million loan from the International Bank for Reconstruction and Development (IBRD), a $60 million concessional loan from the Clean Technology Fund, and a $10 million grant from the IBRD’s Livable Planet Fund. Beyond public funding support, the World Bank will mobilise an additional $4.2 billion in private sector commercial financing, empowering local financial institutions to fund household rooftop solar installations.
The landmark investment is expected to generate approximately 1.7 million jobs throughout the renewable energy value chain, covering solar manufacturing, on-site installation and after-sales services, injecting strong momentum into India’s green job market.
Paul Proccee, World Bank Acting Country Director for India, highlighted the institution’s long-term commitment to India’s solar development. “The World Bank has supported India’s rooftop solar sector for over a decade, mobilising more than $2 billion to drive market growth from 500MW to over 27GW of installed capacity,” he said. “This new financing will help India scale up residential solar deployment, while creating widespread job opportunities across the entire supply chain and installation ecosystem.”
Aligned with India’s national climate targets, the programme supports the country’s ambition to achieve net-zero emissions by 2070 and raise the share of non-fossil fuel energy to 60% of its power mix by 2035. While utility-scale solar has seen rapid growth in India, residential rooftop solar adoption has long been constrained by multiple barriers. The PMSMGBY programme addresses these bottlenecks by offering installation incentives, boosting local solar equipment manufacturing and popularising distributed clean energy.
Moez Cherif, Programme Task Team Leader, noted the transformative impact of the initiative on the residential solar market. “The programme will reshape India’s residential solar sector by eliminating financial barriers and building operational capacity for power distribution companies, banks and industry vendors to deliver integrated solar service solutions,” he explained. “Collateral-free financing will allow ordinary households to install solar systems and substantially cut monthly electricity expenditures.”
