Rewa Ultra Mega Solar Park, a 750MW single-site solar farm, has reached financial close by securing project agreements with the state government of Madhya Pradesh and financing from the World Bank.
The International Finance Corporation, a World Bank affiliate, acted as the lead transaction advisor to the joint venture, helping mobilise $550 million in private investment into the scheme.
The project is led by Rewa Ultra Mega Solar, a tie-up between the state-run Solar Energy Corporation of India and government agency Madhya Pradesh Urja Vikas Nigam.
It was auctioned in three packages of 250MW each, for which winners Mahindra Renewables, ACME Solar and Solenergie Power placed bids at $0.044 per kWh, the lowest tariff ever awarded for a solar project in India, the IFC said. The institution added that the milestone brings India’s solar tariff on par with fossil fuels for the first time.
The winning bidders have signed two power purchase agreements with the Madhya Pradesh Power Management Corporation and the Delhi Metro Rail Corporation. About 24 percent of the electricity generated from the solar farm will be sold to Delhi Metro under a “unique power scheduling arrangement”, supplying about 80 percent of the corporation’s daytime energy requirement, according to the IFC.
The project will receive financing from the World Bank, which approved a $100 million loan last month to the Indian Renewable Energy Development Agency to fund the Rewa scheme and another 250MW project in the Mandsaur district.
The multilateral is set to provide more than $1 billion in lending to India’s solar sector in 2017, as well as supporting the India-led International Solar Alliance, the institution said. The alliance aims to promote solar use globally by mobilising $1 trillion in investments by 2030.
“This is the first time that solar power has achieved grid parity in our country, which means that the ambitious renewable energy target set by the Indian government are within reach,” said Manu Srivastava, chairman of Rewa Ultra Mega Solar and Principal Secretary at the New and Renewable Energy Department of the state government.
India aims to have 100GW of solar generation capacity by 2022, as part of its wider ambition to produce 175GW from renewable energy. In addition to solar, it plans to have 60GW of wind, 5GW of small hydro and 10GW of biomass by the same deadline.