The solar power project that has taken the Indian market by storm is set to receive debt funding at perhaps the cheapest possible rates.
Rewa solar power park will receive debt finance at just 0.25% from the World Bank. A few weeks back, a competitive auction for the 750 megawatt (MW) solar power park in Rewa, Madhya Pradesh, yielded the lowest-ever tariff for a solar power project in India. The contract for development of the solar park has been awarded to three companies that will set up 250 megawatts of capacity each.
For a tender of 750 megawatts, cumulative bids of 7,500 megawatts were placed by participating companies. Three of these companies had offered to set up the entire capacity.
The three units of the solar power park have been awarded at tariffs of Rs 2.970 to Rs 2.979 per kWh (4.4¢/kWh). The lowest bid was placed by ACME Cleantech Solutions, one of the leading solar power project developers in India. Mahindra Renewables, part of a large industrial conglomerate, secured a 250 MW unit at Rs 2.974/kWh, and Solenergi secured the third unit at Rs 2.979/kWh.
The bids placed by these developers are for only the first year of project operations. The tariffs will increase by Rs 0.05/kWh (0.07¢/kWh) for a period of 15 years. Thus, the levelized tariff for all three units will be around Rs 3.30/kWh (4.9¢/kWh).
The International Finance Corporation (IFC) had announced its decision to fund the project itself in 2016, well before any bids were placed by the developers.