In partnership with the Finland and the Netherlands
The state of Gujarat, located in western India, has embraced the idea of renewable energy. The state government plans to develop 500 MW of solar power capacity by March 2014 to meet its energy needs, and to make its capital, Gandhinagar, a model solar city. However, many technical, regulatory, and commercial challenges confront it.
To pave the way for large-scale solar power, the government sought private sector participation to finance and build two 2.5 MW pilot solar projects in Gandhinagar that will use rooftop solar panels to generate a total of five MW annually. Although modest, the project will address issues constraining the adoption of solar power, provide extra power capacity to the grid, and contribute to the reduction of greenhouse gas emissions.
The government of Gujarat needed assistance in selecting the most appropriate technology, and in concluding suitable agreements with private investors and the power procurer.
Gujarat’s Department of Energy and Petrochemicals appointed IFC its lead transaction advisor to execute the pilot public-private partnership project in rooftop-based solar power.
IFC’s Advisory Services in Public-Private Partnerships and IFC’s Sustainable Business Advisory leveraged their respective sector knowledge to successfully execute the project, lay the foundation for a long-term business relationship, and enhance IFC’s position as a global thought leader in this space. Besides providing transaction advice, IFC’s role included technical, legislative, analytical, and marketing support. Specifically, IFC’s support included:
Azure Power and SunEdison each won 25-year concessions for the 2.5 MW pilot solar projects. The two developers will install solar photovoltaic panels on the rooftops of public buildings and private residences and connect them to the grid.
The solar project will demonstrate the technical, regulatory, and financial viability of rooftop solar panels, which will facilitate the expansion of solar power in Gandhinagar and elsewhere in India. As a result of this initiative, IFC has already signed mandates to advise on similar initiatives in five other cities in Gujarat.
*As of December 2012
Minakshi Seth | New Delhi, India
5741+1058 / 91-11-4111-1058 | MSeth@ifc.org Ifc.org/sustainablebusiness