German state-owned development bank KfW is lending $228mn (€200mn) to India to boost renewable energy.
The funding will be used to help the country provide low-interest loans for around 200MW of new energy capacity.
A credit line has been agreed between KfW and Indian public infrastructure finance company Rural Electrification Corporate Ltd (REC) which plans to back primarily solar and wind power projects. The financing will target private sector projects.
The new 200MW of capacity the initiative hopes to create should meet the demand of around 270,000 homes and could help offset up to 285,000 tonnes of annual CO2 emissions.
The low-interest loans on offer are to be supplemented by counterpart contributions from borrowers of up to 30% as well as funding from other lenders.
Joachim Nagel, a member of KfW’s executive board, said: “KfW’s financing to promote the increased use of renewables will make an important contribution to slowing the rise in greenhouse gas emissions and reducing the deficit in the power supply.”