In a major boost for clean energy, the Madhya Pradesh government has signed an agreement for its 750 MW Rewa Ultra Mega Solar Limited (RUMSL) project, the International Finance Corporation (IFC) said on Monday.
The project, which is expeccted to generate clean energy at a record low of Rs 3.30 per unit, will be functional by next year. The project will supply power to the Delhi Metro and Madhya Pradesh Power Management Company.
A World Bank constituent, IFC has termed this a major boost to India's 100 GW solar power goal by 2022.
"With a record low tariff of US cents 4.4 per kilowatt hour offered through a competitive bidding process, the project achieved the lowest tariffs ever awarded for a solar project in India, bringing solar tariffs in the country on par with fossil fuels for the first time," IFC said in a statement.
IFC is the lead transaction advisor for this project, that will mobilise $550 million in private investment and avoid a million tonnes of green house gas emissions.
"The Rewa solar park transaction will have an enormous ripple effect, helping create new markets for large solar projects across India and the region," said Philippe Le Houérou, IFC Executive Vice President and CEO.
He added that the agreement signed by India in the past and including Rewa park, are the next step in IFC's efforts to help India be a global leader in renewable energy and secure a clean, sustainable future.
IFC advised in designing the structure, balancing public and market risks, and creating a competitive auction process for RUMSL.
RUMSL is a joint venture between the Solar Energy Corporation of India (SECI) and Madhya Pradesh Urja Vikas Nigam Limited (MPUVN).
The Rewa solar power project will also receive financing from the World Bank with more than $1 billion in lending over financial year 2017, as well as supporting the India-led International Solar Alliance, which aims to promote solar use globally by mobilising $1 trillion in investments by 2030.
"We are very proud that Madhya Pradesh is leading the way in large-scale renewable power developments in India," said Manu Srivastava, Chairman of RUMSL and Principal Secretary, New and Renewable Energy Department of the Madhya Pradesh government.
Srivastava added that for the first time in the country, the solar power has achieved grid parity, which means that the ambitious renewable energy targets set by the Indian government are within reach.
The project was auctioned in three packages of 250 MW each, and will be one of the biggest single site solar projects in the world. The three winning bidders for the project are Mahindra Renewables, ACME Solar, and Solenergie Power.
"India is IFC's top country exposure, globally. IFC's committed portfolio in India is over $5 billion as of June 30, 2016. In 2016, IFC committed $1.1 billion in new investments in the country," the IFC statement said.