The Asian Development Bank (ADB) on Feb. 27 said it will provide a $100 million loan to Indian government for the development of a transmission system that will distribute 500 MW of solar power from the Charanka Solar Park in Gujarat, India. ADB has signed an agreement with Indian government for the loan.
The loan for the Gujarat Solar Transmission Project is a LIBOR-based loan from ADB’s Ordinary Capital Resources and has a term of 25 years including 5 years of moratorium.
“ADB is committed to generating 3,000 MW of solar power by 2013 under its Asia Solar Energy Initiative and we believe India has the potential to account for a significant share of this target,” stated Hun Kim, country director of ADB’s India Resident Mission.
Using an innovative public private partnership (PPP) model, the project will create job opportunities, improve social services and contribute to poverty reduction locally. It will also support power distribution companies in Gujarat and other Indian power utilities meet part of their clean energy procurement obligations through solar energy.
In addition, an associated technical assistance funded by the Department for International Development of the United Kingdom and administered by ADB will provide vocational training in energy-related skills and livelihood opportunities to local people. At least half of the participants will be women.
“Given rapid growing electricity demand, and increasing reliance on imported sources of fossil fuel, India expects to utilize its large potential for solar energy in an effective manner. This project will not only benefit Gujarat, but will also help develop the PPP solar park model under the National Solar Mission,” said Prabodh Saxena, joint secretary (administration and bilateral cooperation) at the Ministry of Finance.
Under the project’s PPP model, the government has launched an attractive feed-in tariff for solar power payable to the developers while offering them the option of developing projects in a solar park. State government agencies lease the land and provide common infrastructure facilities and services, including site preparation, transmission evacuation, access roads, water and other services, thereby allowing developers to focus on the timeliness and cost efficiency of the project.
The Indian government is planning to generate 20,000 MW of solar power by 2022. They launched the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010, which is expected to generate 1,000 MW by 2013 by ramping up grid-connected solar power generation.
Source: Asian Development Bank | Published: 03-05-2012
