The World Bank has approved a $890 million financing proposal to support the expansion of rooftop solar installations across India through PM Surya Ghar: Muft Bijli Yojana, the government of India’s main home rooftop solar scheme. The program is expected to increase household access to clean electricity, increase local solar manufacturing and services, and increase the availability of cheap financing for home users.
Using Blended Financing to Encourage Private Investment
A $10 million grant from the IBRD Livable Planet Fund, a $60 million concessional loan from the Clean Technology Fund, and a $820 million loan from the International Bank for Reconstruction and Development (IBRD) make up the funding package.
Alongside the multilateral financing, the programme is expected to mobilise nearly $4.2 billion in private capital, primarily through commercial lending for rooftop solar systems. The World Bank said improving access to affordable finance, including collateral-free loans, will be critical to increasing residential solar adoption across the country.
India’s PM Surya Ghar: Muft Bijli Yojana targets rooftop solar installations on 10 million households, making it one of the world’s largest residential solar programmes.
While the country has rapidly expanded utility-scale renewable energy capacity over the past decade, rooftop solar deployment in the residential segment has grown at a comparatively slower pace. The new financing is intended to address this gap by reducing financing constraints and strengthening market participation.
Apart from supporting household financing, the initiative is expected to help strengthen the broader rooftop solar ecosystem by building the capacity of financial institutions, electricity distribution companies (DISCOMs) and solar solution providers.
$2 billion in funding assistance
An estimated 1.7 million employment in manufacturing, installation, operations and maintenance, and other services related to the rooftop solar business might be supported by the program, according to World Bank projections.
“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,” said Paul Proccee, World Bank Acting Country Director for India. “This new financing will help India scale up residential solar, while creating job opportunities across the supply chain and installation ecosystem.”
“The program will transform the residential solar market by removing financial barriers and building the capacity of distribution companies, banks, and vendors to deliver integrated service solutions,” said Moez Cherif, Task Team Leader of the program. “Through collateral-free financing, households can install solar power and significantly reduce their monthly electricity bills.”
The most recent funding for PM Surya Ghar is in line with the World Bank Group’s more comprehensive Country Partnership Framework for India, which centers its development strategy around the creation of jobs, renewable energy infrastructure, and private capital mobilisation.





