World Bank Gives Final Approval For $100 Million Loan For Indian Solar Power Parks

The World Bank recently gave its final approval to a $100 million loan for two large-scale solar power parks in India.

According to a press release issued by the World Bank, a $100 million loan for the Rewa and Mandsaur solar power parks was approved. The solar power parks are part of the 40-gigawatt solar parks program announced by the Indian government.

The World Bank has partnered with the Indian Renewable Energy Development Agency (IREDA). The total debt finance for the two solar power parks is $200 million, of which $100 million will be provided by the World Bank while the balance will be arranged by IREDA. The $100 million loan from the World Bank will include a $75 million loan from International Bank for Reconstruction and Development, a $23 million loan and a $2 million technical grant from the Clean Technology Fund.

Clean Technology Fund has allocated $775 million so far for India’s clean energy investments, including the National Solar Mission.

The $75 million loan from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a maturity of 19 years. The $23 million loan from the Clean Technology Fund (CTF) has a 10-year grace period, and a maturity of 40 years. The $2 million is an interest-free CTF grant.   

The Rewa solar power park will have a total capacity of 750 megawatts, while the Mandsaur solar park will have a 250 megawatt capacity. Individual projects in the Rewa solar park have already been been allocated to three project developers. The competitive auction yielded the lowest-ever solar power tariff in India. All three developers submitted bids of Rs 2.97/kWh (4.6¢/kWh); the levelized tariff for the projects is Rs 3.30/kWh (5.1¢/kWh) over a period of 25 years.

The World Bank has expressed the possibility of providing loans for similar projects in other states like Odisha, Chhattisgarh, and Haryana. Solar power parks with a combined capacity of 500 megawatts each have been approved in Chhattisgarh and Haryana while a 1000-megawatt capacity solar power park has been approved in Odisha. These capacities may increase in the future.