Background

In order to meet the growing demand for electricity within India’s rapidly expanding economy, the Government of India has set an ambitious target of 100 GW of solar power by 2022. Roughly 40% of that target is distributed solar power – rooftop solar, solar mini-grids, off-grid solar, and small-scale grid connected solar projects – which can play a key role in increasing energy access for underserved regions of India.

Falling technology costs and government initiatives in India have created remarkable opportunities for rapid expansion of the distributed solar power market. However, companies in this market are often young and in significant need of early stage funding for project preparation services to help them scale up and become investment-ready.

The US-India Clean Energy Finance (USICEF) initiative is India’s first facility to help promising distributed solar projects develop into viable investment opportunities, via essential early-stage project preparation support. USICEF is a keystone of the commitment made between the Indian and US governments to mobilize finance for Indian distributed clean energy projects.

USICEF will deploy millions of dollars in project preparation support, sourced from leading foundations and the Indian Ministry of New and Renewable Energy (MNRE), to distributed solar power projects under consideration for long-term financing from the Overseas Private Investment Corporation (OPIC). The William and Flora Hewlett Foundation, Good Energies Foundation, the John D. and Catherine T. MacArthur Foundation, and the David and Lucile Packard Foundation have committed funding to USICEF. Climate Policy Initiative (CPI) serves as the Program Manager.

USICEF’s support will lay the foundation for project developers in distributed solar power to access much-needed capital to scale up their businesses. By developing a framework to make projects investment-ready for OPIC and other development finance institutions, USICEF will also in turn help catalyze needed additional investment from private sources.