Jaipur (Natural Energy NewsThe International Finance Corporation (IFC) has announced a commitment of $105 million to support the development of a 550-megawatt peak (MWp) solar power project in Bikaner, Rajasthan. This project, spearheaded by Brookfield Asset Management, aims to bolster India's renewable energy capacity and advance its decarbonization goals.
Funding Through Non-Convertible Debentures
The financial backing will be facilitated through long-term non-convertible debentures allocated to the special purpose vehicles managing the project. This significant investment marks IFC’s first venture in Asia and the Pacific using a hybrid offtake structure. The structure involves selling generated power to commercial and industrial (C&I) consumers under long-term corporate power purchase agreements (PPAs) as well as to merchant markets via exchange.
Competitive Tariffs for C&I Consumers
Brookfield Asset Management will leverage this investment to provide solar power to C&I consumers across India at competitive tariffs. The long-term PPAs will ensure stable and affordable energy prices, aligning with the broader goals of sustainability and carbon reduction.
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Connection to Green Energy Corridor
The project will be integrated into India's inter-state transmission system, contributing to the green energy corridor. This connection is crucial for the efficient distribution of renewable energy across the country, enhancing the reliability and reach of green power.
Environmental Impact
The solar power plants are expected to significantly reduce carbon emissions, cutting them by approximately 804,408 tons annually. This reduction is equivalent to removing over 173,680 cars from the road each year, highlighting the substantial environmental benefits of the project.
India’s Renewable Energy Targets
India has set an ambitious target to increase its non-fossil fuel capacity to 500 gigawatts (GW) by 2030. This project in Bikaner is a step towards achieving this goal, demonstrating the country's commitment to expanding its renewable energy infrastructure.
Growing Interest in Clean Energy
Nawal Saini, Managing Director of Renewable Power & Transition at Brookfield, noted the rising interest in clean energy among companies in India. In the past year alone, over 5 GW of renewable capacity has been added for the C&I sector. Brookfield plans to continue expanding its renewable energy footprint in India, focusing on both state utility and C&I segments.
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Brookfield’s Renewable Power Portfolio
Brookfield currently has a portfolio of over 25 GW of renewable power assets either in operation or under development across India. The company aims to capitalize on the significant transition opportunities available in the country, further contributing to India's energy transition.
Conclusion
The $105 million commitment from IFC for the solar power project in Bikaner is a landmark investment in India’s renewable energy sector. This project not only supports India’s ambitious renewable energy targets but also underscores the growing momentum towards sustainable and clean energy solutions in the region.
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