The World Bank's Board of Executive Directors has approved a $890 million financing package to accelerate India's national solar rooftop programme, aiming to bring clean energy to millions of homes and generate 1.7 million job opportunities across the renewable energy manufacturing, installation, and services value chain. The approval, announced on Friday, 10 July, marks a significant boost to the government's flagship PM Surya Ghar: Muft Bijli Yojana scheme.

What the Financing Package Covers

The funding structure comprises 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 IBRD's Livable Planet Fund. Beyond this, the World Bank will mobilise an additional $4.2 billion in private financing through commercial loans, enabling households to install solar rooftop systems.

The PM Surya Ghar Scheme and Its Targets

Launched by the Government of India, the PM Surya Ghar: Muft Bijli Yojana programme aims to incentivise solar rooftop installations for 10 million rural and urban households nationwide. The scheme is designed to reduce household electricity costs, curb dependence on grid power, and encourage local manufacturing of solar rooftop equipment. While large-scale solar capacity in India has expanded rapidly, residential adoption has remained limited — a gap this programme directly targets.

World Bank's Decade-Long Commitment to Indian Solar

'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.'

Moez Cherif, Task Team Leader of the programme, highlighted the structural change the financing aims to deliver: 'The programme 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. Through collateral-free financing, households can install solar power and significantly reduce their monthly electricity bills.'

India's Broader Clean Energy Commitments

India has committed to achieving net zero emissions by 2070 and raising non-fossil-fuel-based energy resources to 60 per cent of its electricity mix by 2035. This World Bank approval aligns directly with those targets, providing both capital and institutional support to close the residential solar gap. Notably, this is the latest in a series of multilateral interventions backing India's energy transition, underscoring growing international confidence in the country's clean energy trajectory.

What Comes Next

With collateral-free financing now on the table for households and capacity-building support extended to distribution companies and banks, the programme is positioned to unlock a segment of the solar market that policy alone has struggled to activate. The mobilisation of $4.2 billion in private capital will be a key metric to watch as implementation gets under way.