The Asian Development Bank (ADB) announced it will offer $500 million to build renewable energy projects in Rajasthan that will deliver clean electricity to the state and national grids.
The proposed transmission investments include both solar and wind energy installations that will help reduce the country’s reliance on fossil fuels. It will also support evacuation of energy produced in large renewable energy packs that bring in economies of scale compared to smaller stand-alone renewable energy projects.
The investments also come in line with Jawaharlal Nehru National Solar Mission (JNNSM), which aims to deploy 20,000 megawatts of solar power capacity across India by 2022. A large chunk of that is expected to be located in Rajasthan, which has one of the highest levels of solar irradiation in India and is home to over 80% of the solar power set up under Phase 1 of the JNNSM.
The Bhadla Park in Western Rajasthan is the first solar park that is under development by the Rajasthan Renewable Energy Corporation, the state’s renewable energy agency, to house photovoltaic and solar thermal projects and is part of Rajasthan’s aim to reach about 8,000 megawatts of solar and wind generation capacity by 2018, largely from the private sector.
Work has already started on 75 megawatts of solar photovoltaic power at the Bhadla park after competitive bidding in early 2013 under the Rajasthan solar policy and a further 200 megawatts will be added annually starting 2014.
The new power transmission system will involve about 1,850 kilometers of transmission lines, mostly in western Rajasthan, three new 400 kilovolt substations and nine new 220 kilovolt grid substations.
ADB funds comprise a $498 million multi-tranche financing facility including funds from the concessional Clean Technology Fund, and a further $2 million in technical assistance grant that finances infrastructure planning for the Bhadla park, transmission system studies and a community development plan to set up solar power electricity and clean water equipment for small communities.
The government of Rajasthan and state transmission utilities will provide counterpart financing of about $300 million.
The funds will also be used to boost the transmission capacity of seven existing substations. Apart from serving the Bhadla park, the infrastructure supports solar and wind power developments in Western Rajasthan.
The second loan tranche of around $220 million is expected to be released later in 2014 and the final loan of around $128 million expected to be made in 2015. The investment program is expected to be completed by early 2018.