Amid the India, China standoff the Ministry of New and Renewable Energy is planning to set up World Solar Bank, and launch a major funding initiative in a bid to strengthen international solar diplomacy.
The ministry will soon propose the government to set up the World Solar Bank.
The intention behind setting up this unique World Solar Bank is to support International Solar Alliance member countries access affordable funding for solar power projects.
According to a report the MNRE may move the Cabinet note for inviting comments for the bank, to be set up to disburse around $50 billion to ISA member countries over the next ten years.
The bank will require $10 billion in equity capital and $2 billion in paid-up capital. On receiving around 60% of the total capital i.e. commitments of at least $ 6 the bank will be able to start its operations.
The idea of a WSB has gained traction as many of the ISA member countries may have difficulty raising finances on their own.
The proposal comes at a time when the good neighbor China has already taken the lead in setting up the Asian Infrastructure Investment Bank and New Development Bank.
With the increasing tension between the two countries at the border, India looks to have decided to counter its neighbor’s international clout. The move can also be seen as part of growing trend of countries acting against China on multiple fronts.
If everything goes in favor then World Solar Bank will be the third major global initiative by India with respect to solar power. India may become the lead member by taking a 30% stake in the bank, requiring a $3 billion commitment. ISA’ strategic goal includes mobilizing $1 trillion and reducing the cost of finance and technology.