India’s largest photovoltaic solar power plant has started generating electricity to thousands of households and businesses in Mumbai.

The 350-acre, $147.5m Dahanu plant, in the Jaisalmer district of Rajasthan, was developed by India’s Reliance Power.

Jaisalmer has one of the highest levels of solar irradiation in the country, making it ideal for the plant’s 500,000 solar panels.

The facility was built with the help of a $48m loan from the Asian Development Bank, which has set a target of developing, financing, or commissioning 3000 MW of solar power in Asia by May 2013.

It is also lending $103m to Reliance Power to help build the Rajasthan Concentrating Solar Power Project, which will be adjacent to the Dahanu plant, and is financing a transmission line and substation for a solar park in Charanka in Gujarat.

The bank has also set up a financing facility to provide partial credit guarantees to lenders willing to fund solar projects of up to 25 MW. The facility is designed to help reduce risk for the private sector and to mobilise long-term funding for solar energy development.

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