World Bank, IREDA sanction $33 million for solar parks in Madhya Pradesh

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Indian Renewable Energy Development Agency Limited (IREDA) and Rewa Ultra Mega Solar Limited (RUMSL) signed an agreement today for financing the shared infrastructure of two large-scale solar parks in the state of Madhya Pradesh.

The Ministry of New & Renewable Energy (MNRE), The World Bank (WB) & IREDA have been able to work out a proposal to channele $100 million for creating a common infrastructure for ultra-mega solar parks in India to achieve the 100 GW solar capacity addition target by 2022.

Under the WB Line of Credit, IREDA has sanctioned its first loan of INR 2.1 billion (~$33 million) to RUMSL to finance the Rewa and Mandsaur solar parks in Madhya Pradesh.

The agreement was signed by S K Bhargava, Director (Finance), IREDA and Avaneesh Shukla, Executive Engineer, RUMSL in the presence of Upendra Tripathy, Interim Director General, International Solar Alliance (ISA).

The broad terms and condition of the agreement include the fixed interest rate of 8.5% per annum for the entire loan tenure, a moratorium from principal repayments up to five years, and a loan repayment period of up to 20 years.

KS Popli, Chairman & MD, IREDA, has appreciated the initiative of the MNRE. With the support of WB and specifically of the Department of Economic Affairs (DEA), Government of India has been able to reduce the Sovereign Guarantee fee to 0.5%. Popli said, “The support from DEA will enable us to expedite development of such proposals in other states also.”

Manu Srivastava, Principal Secretary and MD, RUMSL mentioned that RUMSL, at present, is implementing two solar parks: Rewa with a capacity of 750 MW, and Mandsaur with 250 MW capacity; both are in Madhya Pradesh.

Together with the solar park model, payment security mechanism and the Line of Credit from The World Bank, the tariff for the Rewa project is recorded as low as INR 3.30 ($0.052)/kWh on a levelized basis.

Out of the total power generated at Rewa solar park, 24% has been agreed to be purchased by Delhi Metro Rail Corporation (DMRC) and the rest 76% by Madhya Pradesh Power Management Company Ltd (MPPMCL).