India is looking to borrow money from the newly created Asian Infrastructure Investment Bank to raise the $500m it needs to fulfil its solar power goals, The Guardian reported, quoting an Indian official. The country is the new lender's second-biggest shareholder after China. The multilateral investment bank, which was launched in January, is based out of Beijing.
“In about six months, funds could start flowing from AIIB,” said Tarun Kapur, joint secretary at the Ministry of New and Renewable Energy. Interest on the loan is likely to be 2%-2.5% and will be linked to Libor – a floating benchmark based on the rate at which commercial banks lend to each other – for a term of over 15 years. The AIIB will lend $10 billion - $15 billion a year for the first five or six years and could start operations in the second quarter of 2016.
Prime Minister Narendra Modi plans to expand India's installed solar capacity to 100 gigawatts from the existing 5,800 megawatts by 2022. India estimates it needs to invest up to $100 billion in the next six-seven years to meet the target. India is in talks with the World Bank, the Asian Development Bank, Germany’s KfW and the New Development Bank, set up by big emerging economies that form the BRICS bloc, to raise more than $3 billion in the financial year that starts on April 1.