The move is in line with India’s plans to increase renewable energy share in generating electricity, especially from solar power.
The countries have entered into an Indo-German Solar Energy Partnership by signing a memorandum of understanding (MoU).
Indo-German joint statement on Climate Change and Energy Technology Cooperation stated: "Both countries welcomed the MoU on an Indo-German Solar Energy Partnership based on concessional loans in the range of €1bn over the next five years."
India Prime Minister Narendra Modi and German Federal Republic Chancellor Angela Merkel will ink an Indo-German Climate and Renewable Alliance, which will focus on making renewable energy available to all at affordable cost.
The countries will improve their existing partnership in the fields of next generation solar technology, renewable energy storage, climate-friendly space cooling technologies, zero emission passenger and freight vehicles, energy-efficient rail and water infrastructure as well as offshore wind energy, according to the Press Trust of India.
Both the countries believe that green house gas emissions could be curbed by generating clean power and reducing energy consumption.
Modi and Merkel have also signed agreements to partner in the fields of food safety, science and technology, skill development and vocational education, manufacturing, civil aviation, disaster management and agriculture.
Modi said: "We see Germany as a natural partner in achieving our vision of India’s economic transformation. German strengths and India’s priorities are aligned.
"Our focus tends to be on economic ties. But, I believe that in a world of seamless challenges and opportunities, India and Germany can also be strong partners in advancing a more human, peaceful, just and sustainable future for the world."
The two countries have also signed two loan agreements worth €125m for financing two projects under the Green Energy Projects (GEC) programme, in the Indian states of Himachal Pradesh (€57m) and Andhra Pradesh (€68m).
The projects will develop tranmission infrastructure for reneable energy.
Image: Indian Prime Minister Narendra Modi with German Chancellor Angela Merkel. Photo: courtesy of Press Information Bureau, India.
