As the world, especially emerging economies, grapple with the challenges posed by climate change, it is essential to come up with innovative solutions to address energy shortages that can significantly benefit people with no or limited access to energy. An International Finance Corporation (IFC) expert analysis where India fits in. At COP 21 in Paris last year, leaders from across the world recognised climate change as an urgent and irreversible threat to the planet that required nations to curb greenhouse-gas emissions. The dialogue encouraged nations to scale up funding to help developing countries shift to green energy and fortify themselves against climate-change impacts. The partnership between India and France to form the International Solar Alliance (an association of 121 countries led by India) to collaborate on increasing solar energy use around the world, will mobilise $1 trillion investments for solar power by 2030. The alliance will hopefully see rapid progress in times to come. India - A Bright Spot The National Solar Mission initiative, launched by India in 2010, was the first initiative that envisaged significant capacity addition of solar power in the country's energy mix. In the last six years, the solar sector has seen impressive growth, from a mere 10 MW to around 8 GW. In fact, capacity has more than doubled in just the last two years. This is important progress - and there is still a long way to go to achieve the country's target of 100 GW of solar power by 2022, of which 40 GW will come from rooftop projects. India has shown strong leadership by taking on both the challenges of climate change and providing energy access to over a billion citizens. Its commitment to supply 24/7 electricity over the next five years to all citizens is a challenging task. For this dream to reach fruition, it is crucial that India achieves the ambitious target of 100 GW solar power as solar-based power both increases power supply and reduces the carbon footprint of the energy mix. The World Bank has committed $1 billion to support India's renewable energy generation push in India. This money will be invested in solar rooftop projects, infrastructure for solar parks, bringing innovative solar and hybrid technologies to market, and transmission lines for solar-rich states. The World Bank Group has signed up as a financial partner for the International Solar Alliance. IFC is a pioneer in renewable energy in India, investing in the sector since 2009. It is now helping Madhya Pradesh set up the largest single-site solar power project in the world, with a capacity of 750 MW. IFC's advisory services team is structuring and implementing the transaction and helping attract private investments to the project. Some years back, IFC's Public-Private Partnership and Sustainable Business Advisory teams took an early initiative to help the Indian state of Gujarat implement the country's first rooftop solar program in Gandhinagar. IFC assisted the state government on transaction structuring, supported setting up a competitive bidding process, so that the state government could evaluate the bids and identify appropriate private partners for implementing the project. Similar advisory support could be provided in other cities and states to replicate the success of this experience. These initiatives have demonstrated that scaling up renewable capacity is possible to meet India's energy needs in a sustainable manner. Innovative Financing Solutions The 100 GW target will require close to $100 billion of new investments in the next few years. Domestic lenders have supported the deployment of renewable energy through long-term loans and can be expected to continue to do so. Refinancing of projects has also picked up. However, such large-scale lending cannot be done by domestic lenders alone. India needs to mobilise investments from the local capital markets and from other countries, including institutional investors and commercial banks. In 2013, IFC unveiled the onshore Maharaja and offshore Masala bond programs. These programmes have attracted new classes of investors from within and outside India, lengthening maturities/ developing yield curves, and mobilising long-term rupee financing for infrastructure needs. Green bonds are innovative instruments that help raise capital for projects with high climate-smart and climate-friendly outcomes. These bonds attract more progressive and long-term investors and enable vast amounts of capital to be channeled to support a low-carbon climate-resilience path. As an institution that believes in creating opportunity where it is needed most, IFC was first in India to issue green bonds. We have also been the principal subscriber to green bonds issued by banks in India to help construct green residential buildings, develop renewable energy projects, and create jobs. For example, in August 2015, IFC invested $50 million in green bonds issued by Yes Bank. The success of this first issue encouraged the government to ask public sector units to issue green bonds to fund renewable projects in the country. The scale of capacity addition is also an opportunity for India's manufacturing sector. Recent reforms, such as easing of regulations and initiatives such as the Make in India program, are helping revive the investment climate. Results have been mixed. Currently, solar cell manufacturing in India has a production capacity of less than 2 GW per year, which is low compared to the scale achieved by Chinese companies. Especially, in the context of the supply glut facing the international solar equipment market. On the other hand, India has created significant manufacturing capacity in other parts of the sector-primarily solar inverters, mounting structures, and transmission systems. Recent estimates from Bridge to India, a consultancy and knowledge services provider in the Indian renewable market, indicate that companies such as TMEIC and Hitachi are planning to use their Indian manufacturing units to make solar inverters for export. Foreign direct investment (FDI) is another avenue for large-scale investments in the sector. In the last three years, India attracted about $2 billion FDI in the renewable sector. Prominent players from Japan, the US, China, France, Finland, and Canada have announced joint ventures with Indian companies to set up solar manufacturing facilities and solar power plants. With 100 per cent FDI permitted under the automatic route in the solar sector, more global organizations are expected to foray into the Indian solar sector. This will boost solar manufacturing and create a large number of jobs. Attracting Investments in Rural Solar Power With about 60 million households still not electrified and relying on energy sources other than grid electricity for lighting and other basic energy needs, off-grid renewable energy is emerging as a powerful solution to address the access-to-electricity problem in rural India. Solar power becomes especially critical for the remote corners of the country where grid-connected power is unavailable or difficult to reach. There are now a wide variety of options that can provide off-grid solar electricity to individual households. These solutions range from pico-solar lanterns to large solar home systems and mini-grid connections that can power several lights and electrical appliances. The government's policy draft on mini-grids is a step in the right direction and will bring much-needed regulatory and policy clarity in the sector. Meanwhile, IFC's Lighting Asia/India programme, has been working in three states - Rajasthan, Uttar Pradesh and Bihar-to provide safe and reliable electricity access by increasing awareness on solar lighting among consumers. IFC is also working to bring on board manufacturers and distributors of quality-assured solar lighting products. There is a need to work with the private sector to support a market-based approach and pave the way to attract more investments into the rural solar sector. Way forward: Sustained Optimism for Solar India is firmly committed to providing affordable energy access to its citizens and reducing dependence on fossil fuels. The rapid scaling up of solar installations, various states announcing solar policies, and sustained interest from both domestic and global players indicate that there is optimism in the sector. IFC has supported the private sector in India for six decades now and is also one of the earliest supporters of renewables. IFC's portfolio companies today have set up over 3 GW of different forms of renewable power projects in the country. And, we are working to increase that.