Washington and New Delhi are likely to sign a $1-billion partnership for the Indian renewable energy sector, paving the way for an investment boost from several US and global investment agencies. Sources close to the development said the deal would be through two “innovative investment mechanisms” aimed at off-grid solar projects and rural electrification.

The two initiatives for solar power are the US-India Clean Energy Finance (ICEF) and the US-India Catalytic Solar Finance Program (ICSFP). ICEF would raise close to $20 million from various US agencies in partnership with ...