Multilaterals the Asian Development Bank (ADB) and International Finance Corporation (IFC) announced today they had extended loans of up to $100 million each to ACME Solar Energy Private Ltd JV alongside the latter's $65 million equity contribution to the development of power plants in Rajasthan and other states in India.
The solar power joint venture formed in December 2013 between French investment group EREN (25 percent), French renewable energy firm EDF Energies Nouvelles (25 percent), and Indian renewable energy and telecom specialist, ACME Group (50 percent), has a pipeline of projects expected to generate an aggregated capacity of 350 megawatts (MW) of clean energy. This accounts for 12.7 percent of the current total installed solar power capacity in India estimated as at September last year and 1.6 percent of the targeted installed generation capacity in the country by 2022.
“Solar and other renewable power sources are essential for India’s energy diversification and security, and for underpinning the country’s long term growth,” said Isabelle Chauche, investment specialist in ADB’s Private Sector Operations Department. “ADB’s support for ACME will help break down barriers for more private sector investment, including foreign direct investment, in clean energy infrastructure.”
The ADB and IFC's financial assistance, which will help to meet a dire need for alternative sources of energy, is part of the second phase of the Indian government’s Jawaharlal Nehru National Solar Mission, a three-phase policy which aims to promote ecologically sustainable growth while addressing India's energy security challenge over a ten-year time span. The policy was launched in 2012.
Approved plants to date are located in the Jodhpur district of Rajasthan state, where solar irradiance levels are among the highest in the country. The projects will rely on solar panels from a range of ADB-approved suppliers and sell the power to the Solar Energy Corporation of India at a fixed tariff of Rs5.45 per kilowatt hour (Kwh) over the next 25 years. ADB financing for those projects has reached financial close.
Additional projects, to be financed by the ADB, will be selected on criteria including long term off-take of generated electricity, financial viability, and compliance with environmental and social safeguards. The 200MW of combined generating capacity will provide 380,000 megawatt-hours of electricity a year, avoiding around 280,000 tons of carbon dioxide which would otherwise have been emitted from fossil fuel power generators.