New Delhi, December 5, 2011
The Manila-based Asian Development Bank (ADB) will provide a long-term loan of upto $ 48 million to finance Reliance Power Limited's 40 MW solar photovoltaic power plant at Dahanu in Jaisalmer district of Rajasthan.
The project, which will be India's largest solar photovoltaic power plant, is expected to be completed by the second quarter of 2012.
Rajasthan has one of the highest levels of solar irradiation in India.
“India’s solar energy potential is one of the highest in the world and this plant will help kickstart large-scale, private-sector solar electricity generation in the country,” said Michael Barrow, Director in ADB’s Private Sector Operations Department.
An ADB press release said Reliance Infrastructure Limited, a leading private distribution company, will buy the electricity under a long-term power purchase agreement to fulfill its renewable purchase obligations set by India’s electricity regulators – the first time for a fully private sector transaction in solar power. The power will be distributed to households in Mumbai.
The plant marks Reliance Power’s first foray into solar energy and is part of the company’s plans to sharply expand its renewable energy portfolio.
The Export Import Bank of the United States is also providing funding for the project that is expected to cost around $ 147 million.
The project will support the Government of India’s push to promote environmentally sustainable energy growth while diversifying the country’s sources of energy. By supplying electricity from a clean and renewable source, India will avoid around 41,000 tons of carbon dioxide emissions a year had demand been met by conventional fossil fuel-based power plants, the release said.
According to it, the project complements other ADB initiatives in the solar sector in India, including a financing facility that provides partial credit guarantees to lenders willing to fund solar power projects of up to 25 MW. That facility is designed to help reduce risk for the private sector, and to mobilize long-term funding for solar energy development.
As a part of its Asia Solar Energy Initiative, ADB aims to help develop, finance and commission 3,000 MW of solar power generation capacity in its developing member countries by mid-2013, the release added.