Deals

Gujarat solar power project gets IFC help

World Bank’s International Finance Corporation (IFC) is helping the state of Gujarat in India to design and build a solar power project on a public-private partnership (PPP) basis. The entire project, which is divided into two phases, aims to generate 40 megawatts of power for nearly 100,000 households.

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The International Finance Corporation (IFC), the private investment arm of the World Bank, is working on a public-private partnership (PPP) deal with the Indian state of Gujarat to design and structure a distributed rooftop solar power project in Gandhinagar, the state capital. The project is expected to mobilise private sector involvement in financing, construction, operation and maintenance of the facilities.

The project consists of two phases – a pilot phase that involves a 5-megawatt solar installation project and is expected to reduce greenhouse gas emissions by about 6,000 tonnes a year, according to a press release from IFC. The total cost of the pilot phase is estimated at $5 million, which will be financed completely by the private sector. The bid for the pilot phase is likely to be awarded to the developer in mid to late 2011 and construction will begin around 2011 to 2012, a spokesperson from IFC told Infrastructure Investor.

Meanwhile, the second phase involves a 35-megawatt solar installation project. Together, the entire project is expected to generate 40 megawatts of power for nearly 100,000 households in Gandhinagar and contribute to Gujarat’s goal of installing 500 megawatts of solar capacity by March 2014.  The total cost of the second phase of the project is estimated at $140 million and a construction date has still not been decided, according to a spokesperson from IFC.

The project will be managed by Gujarat Energy Research and Management Institute in consultation with IFC’s Public-Private Partnership and Sustainable Business Advisory teams for design and structuring and providing expert advice to the government on finding the right private parties to take on the project.

“The project aligns with IFC’s efforts to create a sustainable solution linking government and private incentives. IFC is keen to support well-structured projects in this area, and we’re happy to offer advisory and investment support to Gujarat to help promote the solar energy sector,” said Rashad Kaldany, IFC vice president for Asia, Eastern Europe, Middle East, and North Africa.