Question : On March 18, 2021 the United States Agency for International Development(USAID) & US DFC announced a XYZ loan guarantee program to finance rooftop solar. What is the value of XYZ ?
(a) 41 million dollar
(b) 61 million dollar
(c) 81 million dollar
(d) 91 million dollar
Ans. (a)
Related facts
- On March 18, 2021 the United States Agency for International Development & US DFC announced a 41 million dollar loan guarantee program(LGP) to finance rooftop solar.
- US DFC stands for — U.S. International Development Finance Corporation.
- LGP will help finance investments by Indian Small and Medium Enterprises (SMEs) in renewable energy solutions, including rooftop solar installations.
- These loans will enable SMEs to access reliable power and cut costs.
- Investments in solar solutions, secured by these credit guarantees, will improve access to clean, steady, and affordable energy as well as further progress towards India’s clean energy transition and climate change mitigation.
- India’s commercial and industrial sectors pay high fees for their electricity, making rooftop solar a sustainable, cost-saving investment, but SMEs and residential consumers face obstacles in securing the financing needed to install and use rooftop panels.
- SMEs account for 48 percent of the total energy consumed in India’s industrial sector.
- Partnership
- USAID(United States Agency for International Development) and DFC(Development Finance Corporation) partnered with the New York-based Encourage Capital, an environmentally focused investment firm, and two Indian non-banking financial companies, cKers Financial and woman-owned Electronica Finance Limited (EFL), to address this challenge.
- Encourage Capital has invested 15 million dollar in EFL, which will use the USAID-DFC loan portfolio guarantee to stimulate the rooftop solar market—representing a $9 billion market opportunity—for SMEs.
- USAID in rooftop solar market
- USAID will continue its support through providing technical assistance to address quality and safety concerns in the rooftop solar market.
- Significance of LGP
- Once these credit guarantees lower the financial hurdle for installing rooftop solar, India will realize numerous benefits resulting from the transition to this green technology.
- These guarantees have the potential to unlock lifesaving social benefits and robust economic growth.
By — Pankaj Pandey.