India is to receive a loan of $98m from the World Bank and a grant of $2m to its government to go towards the development of large-scale solar power plants.
The Shared Infrastructure for Solar Parks Project will use the loan to finance Indian Renewable Energy Development Agency (IREDA), which will in turn provide loans to Indian states for investing in solar parks.
The first solar parks earmarked for funding are the Rewa and Mandsaur districts of Madhya Pradesh, which will have installed capacities of 750 MW and 250 MW, respectively.
Apart from the state of Madhya Pradesh, other states such as Odisha, Chhattisgarh, and Haryana will also receive funds to develop solar parks.
India’s Ministry of Finance, Department of Economic Affairs Joint Secretary Sameer Kumar Khare said: “The Government of India is committed to set-up an enabling environment for solar technology penetration in the country.
“This Project will help establish large-scale solar parks and support the government’s plan to install 100GW of solar power out of a total renewable-energy target of 175GW by 2022. The use of this clean and green technology will also help contribute to global efforts to meet the challenges of climate change.”
IREDA will use the funds to develop a common infrastructure such as power pooling substations, intra-park transmission infrastructure, providing access to roads, water supply and drainage, among others.
World Bank project Task Team Leader and Senior Energy Specialist Surbhi Goyal said: “Through this engagement, it is expected that the investments will boost market confidence, enable demonstration of economies of scale in large-scale grid-connected solar generation, contribute towards pushing down equipment and transaction costs, increase efficiency while reducing unit costs of solar power, and catalyze further support from other investor groups to help India achieve its ambitious target of installing 100 GW of solar power capacity by 2022.”