India's solar rooftops get World Bank boost, lender approves $890 million support for PM Surya Ghar

The World Bank has approved a $890 million financing package to support India's rooftop solar programme for expanding clean energy access, creating 1.7 million jobs and mobilising billions of dollars in private investment.

The financing package, approved by the World Bank's Board of Executive Directors, includes 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, according to a World Bank statement.

The multilateral lender said it would also help mobilise $4.2 billion in private financing through commercial loans to enable households to install rooftop solar systems.

The support will help accelerate the Centre's PM Surya Ghar: Muft Bijli Yojana, under which the government aims to install rooftop solar systems in 10 million rural and urban households across the country.

The scheme seeks to reduce household electricity bills, expand the use of clean energy and promote domestic manufacturing of rooftop solar equipment.

India has committed to achieving net-zero emissions by 2070 and increasing the share of non-fossil fuel-based energy resources in its electricity mix to 60 per cent by 2035.

In December last year, the government informed the Parliament that PM Surya Ghar: Muft Bijli Yojana has helped over 7.7 lakh households across the country achieve zero electricity bills.

The Centre provides financial assistance along with collateral-free loans at a lower interest rate linked to the repo rate.

As of December 9, 2025, a total of 19.45 lakh rooftop solar systems had been installed nationwide.

While utility-scale solar capacity has expanded rapidly in recent years, residential rooftop solar adoption has remained relatively limited, prompting the government to launch targeted incentives under the PM Surya Ghar scheme.

"The World Bank has been supporting India's solar rooftop sector for over a decade, mobilising more than $2 billion to catalyse market growth from 500 MW to over 27 GW of installed capacity," World Bank Acting Country Director for India Paul Proccee said.

He said the new financing would help scale up residential solar while creating employment opportunities across manufacturing, installation and related services.

According to the World Bank, the programme is expected to generate around 1.7 million jobs across the renewable energy manufacturing, installation and services value chain.

Task Team Leader Moez Cherif said the programme would help transform the residential solar market by removing financial barriers and strengthening the capacity of power distribution companies, banks and vendors to deliver integrated service solutions.

He said collateral-free financing under the programme would enable more households to install rooftop solar systems and substantially reduce their monthly electricity bills.