Germany will provide soft loans of up to 1 billion euros ($1.3 billion) for a six-year period starting next year to support renewable energy programmes in India.
This is part of a development cooperation agreement with India signed by union minister for renewable energy Farooq Abdullah and parliamentary state secretary in the German federal ministry for economic cooperation and development Gudrun Kopp.
The "joint declaration of intent" between the two countries signed during the second inter-governmental consultations concluded in Berlin yesterday, includes assistance is intended to finance joint development of technical solutions to overcome the problems facing the integration of power grids and also to speed up the construction of power lines to efficiently transport electricity generated by renewable energy sources, the ministry said in a press statement.
India and Germany are currently focusing on environment protection and combating climate change, promotion of renewable energy and energy efficiency, adaptation to the climate change and support for environmentally relevant urban infrastructure development.
Building up of the power transmission lines and efficient feeding of electricity generated by renewable energy sources into the power grid "presented enormous challenges" to India and Germany is keen to support its Indian partners in these areas, Kopp said.
Development of renewable energy is a common goal of India and Germany, she said.
There is no alternative to building up renewable energy in the fight against climate change. Building up of renewable energy is very crucial to bring power generation in India in harmony with environment protection, Kopp said.
The agreement was signed in presence of Prime Minister Manmohan Singh and German Chancellor Angela Merkel, who jointly chaired the inter-governmental consultations.
''Germany is one of India's most important partners. It is not merely because of German excellence in science, technology, production and organisation.
It is more because we share a relationship of comfort, candour and confidence, which rests on shared values and draws upon centuries of intellectual, cultural and philosophical exchanges,'' prime minister Manmohan Singh said in remarks at the closing ceremony of the `Days of India in Germany.
In every area of our national development goals – infrastructure, manufacturing, clean energy, science and technology, higher education and skill development – I see enormous opportunities for fruitful partnerships between our two countries, he said.
The two sides have signed ten agreements, including collaboration on a unique and potentially transformative green energy corridor in India and a joint fund for collaboration in higher education, the prime minister added.