India, Germany ink pact for Rs 1,958 cr finance to develop energy-efficient housing programme

India has secured a USD 277 million (about Rs 1,900 crore) loan from Germany to establish an energy-efficient housing programme in the country.

A loan agreement has been signed between State Bank of India (SBI) and German development bank KfW for USD 277 million to establish an energy-efficient housing programme in India, SBI said in a release.

The financial cooperation pact has been signed in October between the Government of India and the Government of Germany.

The programme shall be part of the Indo-German Development Co-operation, guided by the 2030 Agenda for Sustainable Development, SBI said.

"Under the programme, both builders and homebuyers shall be financed for developing/purchasing energy-efficient residential projects that achieve at least 25 per cent energy savings in comparison to standard reference buildings.

"Hence, this programme will contribute to India's policy framework towards energy conservation in the residential building sector and reduction in greenhouse gas emissions," the release said.

SBI said that in addition to this loan, KfW will also extend a grant of 1.5 million euros (about Rs 12 crore) as a technical assistance package.

The technical assistance funds shall be used for supporting SBI in the preparation, implementation and monitoring of the programme.

Further, an investment grant of 10 million euro (Rs 791 crore) has also been provided for incentivising builders to develop housing projects that achieve significantly higher levels of energy savings vis-a-vis standard reference buildings (at least 40 per cent savings).

The arrangement of the loan and the grant facilities was facilitated by SBI's investment banking subsidiary SBI Capital Markets Ltd.