One of India’s largest private sector power generation company, Reliance Power, has signed an agreement to set up a 6 GW solar energy park in Rajasthan.
Reliance Power has signed an agreement with the Chief Minister of Rajasthan to set up 6 GW worth of solar power capacity over the next 10 years. This is the fourth such agreement signed by private project developers to set up large-scale solar power capacity in the state.
The entire project is estimated to require an investment of $6 billion. Over $4 billion of this is expected to come through debt-financing. The company may look at multiple international development banks to help finance this project, as it has done in the past.
The agreement was signed as the Chief Minister dedicated a 100 MW concentrated solar power (CSP) project developed by Reliance Power under the National Solar Mission. The project was co-financed by the US Export-Import Bank, the Asian Development Bank, and the development bank of Netherlands.
Reliance Power currently has an installed power generation of about 6 GW. This includes thermal, hydro power, as well as other renewable energy capacity. The company, however, has been struggling with some of its thermal power assets and is now understandably looking to develop large-scale renewable energy projects.
Since the change of government in Rajasthan, no competitive auction for allocation of solar power projects has taken place even though the capacity addition target has been increased to 25 GW by 2022. Through the four agreements signed by the Rajasthan government with private project developers, 22 GW of new solar power capacity would be operational after 10 years. In comparison, India’s entire installed solar power capacity currently stands at just over 3 GW.
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