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Solar energy India
Better climate through Indo-German solar partnership
Gumla is a small agricultural district in northeastern India. Many people live here as if modern, economically dynamic India did not exist. They get up at sunrise and go to bed with the last rays of sunshine. They simply cannot switch on the light – they do not have a reliable power supply.
Their situation is not exceptional: millions of Indians in rural regions have no access to electricity, or only very unreliable access. Decentralised solar thermal systems can change this. In Gumla, they are already being used in some places – thanks in part to the Indo-German solar partnership.
Representatives of the Federal Ministry for Economic Cooperation and Development (BMZ) and the Indian Ministry of New and Renewable Energy (MNRE) signed the agreement in 2015. Since then, KfW has financed projects totalling around one billion euros in India. The funds went into three sectors: the construction of large solar parks, the installation of solar systems on rooftops of residential buildings and factories, and the development of decentralised solutions such as those from Gumla.
The Indo-German Solar Partnership has contributed to the realisation of 30 solar projects in eight Indian states. In total, their plants have a capacity of four gigawatts and supply five million people with green electricity. In this way, they save more than six million tons of CO2 emissions each year. By comparison, a city like Frankfurt emits 8.5 million tons of CO2 annually.
The solar partnership is thus a building block for the Indian government to achieve the climate targets it has set itself. The country has set itself the goal of becoming climate neutral by 2070 and generating half of its installed electricity capacity from non-fossil fuels by 2030 – the latter could already be achieved by 2025. At the same time, coal's share of actual electricity generation fell to 68% in the first half of 2025, down from 72% in the previous year. This is an encouraging sign, especially as total electricity generation rose by 1% during this period. In order to move closer to the goal of climate neutrality, the expansion of renewable energies must be significantly accelerated. Meanwhile, more and more solar and wind projects are being put out to tender in combination with large battery storage facilities, some of which have already been implemented. The electricity generation costs of such combined power plants have recently fallen to levels below those of new coal-fired power plants. This could significantly advance the energy transition in India – progress that was hardly imaginable just a few years ago.
It is no coincidence that the Indian government also relies on KfW to implement its plans. KfW has been involved in solar projects on the subcontinent for a long time. As early as 2011, on behalf of BMZ, it financed the Sakri Solar Park with a capacity of 125 MWp – the largest plant in the country at the time. Since then, it has supplied 220,000 households with green electricity and saved more than 150,000 tons of CO2 annually.
Even today, a significant part of KfW’s funds is used to build up solar parks. Investments in Indian solar systems pay off: the sun shines more intensively and reliably on the subcontinent than in Germany. In addition, an industry has established itself that can achieve very low plant costs. The electricity generated by photovoltaics in India therefore costs only half as much as in Central Europe. This makes the solar partnership meaningful for Germany and the world. For climate protection, it doesn’t matter where emissions are reduced – the main thing is that they are reduced.
As part of the solar partnership, KfW is providing the State Bank of India with a loan of EUR 70 million to refinance the Gadag-Koppal RTC park in Karnataka. The project, implemented by ReNew Surya Ojas Private Limited, combines wind and solar power with a battery storage system that has a capacity of 150 MWh. This ensures a reliable energy supply around the clock, even when there is little sun or wind. The park is one of the first battery storage facilities of this size in India. The project also illustrates the potential of the Indo-German partnership to promote exports by German and European suppliers. The battery components are supplied by Fluence, which was co-founded by Siemens and is therefore a company with German participation.
At EUR 20 million, investments in decentralised solar systems account for the lowest proportion of KfW loans under the solar partnership. However, the projects make a big difference to local people. Once installed, the "Solar Powered Mini Grids" upgrade municipal infrastructure and promote economic development in the municipalities.
The use of mini grids in Gumla district has also shown this: many farmers use the electricity here to operate irrigation pumps in their fields, thereby increasing yields. In grain processing, the use of machines – such as peelers, mustard presses or grain mills – has so far been able to accelerate manual activities. Some villagers have also opened up new business areas, for example through the further processing of agricultural products.
The systems were developed by the Indian non-profit organisation Mlinda Charitable Trust. For Mlinda, it is important that women benefit at least equally as much as men from electrification projects. In this way, the Indo-German solar partnership not only contributes to better climate protection, but also to more equal opportunities for women.
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