European Investment Bank has committed to provide a loan of 200 million euros to the country's largest public sector State Bank of India to fund solar projects across India. The interest on the loan will be at a concessional rate. A SBI official said the interest rate will be three-month LIBOR plus 0.99 percentage point.
LIBOR or London Interbank Offered Rate is used as a benchmark for calculating interest rates on various loans.
Speaking at the inauguration of European Investment Bank's branch in Delhi, Union Finance Minister Arun Jaitley said infrastructure creation in India will pick pace in the next two decades. Economic reforms will continue to gain momentum in coming years as the country looks to push growth and attract investment in the infrastructure sector, he said. Financing of construction of new solar power projects will support India's plans to install 20 giga-watt of grid connected solar power by 2020, which is a part of Jawaharlal Nehru National Solar Mission, he said.
EIB has also committed to release second tranche of 250 million euros for construction of Lucknow Metro. This is a part of 450 million euros loan the bank willgive for the Lucknow metro project.
Jaitley added, "Contrary to all the global noises we see in various parts of the world, there are no voices of protectionism in India and therefore, we have opened up in terms of our economy and today we are amongst the most open economies in the world." The minister also said India needs international investment in the form of FDI and funding from various agencies, apart from public investment.