After achieving significant success in large-scale solar power projects and solar parks, the Indian government is now looking to expand the decentralized solar power sector as well.
According to media reports, the government-owned Energy Efficiency Services Limited (EESL) is planning for a joint venture with oil giant Royal Dutch Shell to invest in decentralized solar power plants.
Through this joint venture, EESL plans to invest over Rs 40,000 crore (US$5.3 billion) for setting up 5 gigawatts of decentralized solar power across the country. The plants will also have storage facilities and will be set up in rural areas of the country.
As per unnamed sources, EESL is in talks with other investors as well for a stake in the venture. The joint venture would invest Rs 8,000 crore (US$1.1 billion) considering the debt to equity ratio of 80:20. The EESL can hold 51% stake in the JV. The company has hired Investec Capital Services to advise on the deal and to provide valuation of the EESL’s projects in coming three months.
EESL currently has operational solar projects of 100 megawatts in Maharashtra and another 700 megawatts of projects are in the pipeline. The ultimate aim of the company is to increase the generation capacity to 5 gigawatts with storage.
Until now EESL has concentrated on development of electric mobility infrastructure in India. It has issued a number of tenders for the procurement of electric cars for government agencies and ministries. EESL has successfully implemented a nationwide scheme to replace conventional lightning systems with energy-efficient LEDs. The UJALA (light in Hindi) scheme has resulted in over 360 million conventional lightning systems with LEDs leading to US$2.5 billion in financial savings.