World Bank Arm Provides $198 Million Guarantee to Support India’s Rooftop Solar Push

Washington - India’s rooftop solar expansion programme has received a major boost after the Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group, issued a $197.67 million guarantee to support refinancing of a $500 million World Bank loan for grid-connected solar systems.

The five-year guarantee backs a non-shareholder loan extended by Citibank N.A. to the State Bank of India (SBI), according to an official statement. The refinancing is aimed at strengthening SBI’s capacity to expand financing for commercial and industrial rooftop solar installations across the country.

The transaction is part of India’s broader strategy to accelerate clean energy adoption and reduce reliance on carbon-intensive thermal generation. Rooftop solar installations supply grid-connected electricity to commercial and industrial consumers, helping cut greenhouse gas emissions while lowering energy costs.

Supporting India’s Clean Energy Transition

The refinancing relates to a national programme delivering grid-connected rooftop solar photovoltaic (GRPV) systems to commercial and industrial customers. SBI launched the rooftop solar initiative in 2016 with support from the World Bank, combining financing and technical assistance to demonstrate the commercial viability of distributed solar in India.

According to the latest implementation report from the International Bank for Reconstruction and Development (IBRD), 1,004 megawatts of GRPV capacity were achieved under the programme.

Tsutomu Yamamoto, Managing Director of MIGA, said the guarantee would strengthen SBI’s renewable energy portfolio and contribute to India’s climate objectives.

“MIGA’s guarantee will support SBI’s growing portfolio of renewable energy in India and contribute to India’s climate goals,” Yamamoto said, adding that the cooperation between MIGA and IBRD reflects a coordinated approach within the World Bank Group to mobilize private capital.

India has set ambitious clean energy targets as part of its long-term commitment to achieving net-zero emissions by 2070. Annual investment needs are estimated between $160 billion and $300 billion to meet those goals.

Role of SBI and Citi

SBI, one of India’s largest financial institutions, has been mandated to allocate at least 7.5 percent of its domestic gross advances to green financing. The refinancing will help the bank lower borrowing costs and diversify funding sources, while freeing up lending capacity for additional climate-related projects.

Rana Ashutosh Kumar Singh, Managing Director of SBI, described the refinancing as a “pioneering transaction.”

“This unique alliance among SBI, MIGA, and Citi will significantly contribute to reducing the nation's carbon footprint, aligning with India's Net Zero ambitions and underscoring SBI's steadfast commitment to sustainable development,” Singh said.

Citibank acted as sole lender, mandated lead arranger, facility agent, and MIGA coordinator for the transaction. The deal follows a similar collaboration among Citi, MIGA and SBI in 2024 involving rooftop solar refinancing.

Stephanie von Friedeburg, Global Head of Citi’s Public Sector Group, said the agreement demonstrates the role of public-private partnerships in accelerating sustainable infrastructure.

“This landmark transaction exemplifies Citi's commitment to fostering sustainable development and supporting India's transition to a greener economy,” she said.

Mobilising Private Capital

MIGA stated that transferring the loan exposure to commercial lenders’ balance sheets will free up headroom for additional World Bank lending to the Government of India.

The guarantee forms part of the World Bank Group’s broader effort to scale up credit enhancement and political risk insurance instruments to attract private investment into developing economies. In 2024, the World Bank consolidated its guarantee products under MIGA, with a target of increasing annual guarantee issuance to $20 billion by 2030.

SBI currently serves more than 480 million customers through over 22,400 retail branches in India and operates 235 offices across 29 countries.

The latest refinancing is expected to reinforce investor confidence in India’s distributed solar market and support the country’s ongoing shift toward renewable energy as a central pillar of its economic and environmental policy.