The entity responsible for the development of two solar power parks with a cumulative capacity of 1 gigawatts recently signed a funding agreement to finance the first phase of development.
Rewa Ultra Mega Solar Limited signed an agreement with the Indian Renewable Energy Development Agency (IREDA) for funding worth $35 million. The funding will be used for the development of transmission and power infrastructure at the 750 megawatt Rewa solar power park and the 250 megawatt Mandsaur solar power park, both in the state of Madhya Pradesh.
The World Bank will provide a total of $100 million in debt funding for the two solar parks and $35 million is the first installment of that funding. The total funding includes a $75 million loan from the International Bank for Reconstruction and Development (IBRD) and a $23 million loan from the Clean Technology Fund (CTF), and an interest-free CTF grant of $2 million.
IREDA is offering debt funding to Rewa Ultra Mega Solar Limited at an interest rate of 8.5%. The World Bank is offering funding guarantee at 0.5%, instead of the 1.2% currently being levied by the Indian government. Solar power parks and smart city projects are likely to receive guarantees at concessional rates of 0.5%.
The auction for the Rewa solar power park made history, as it was oversubscribed ten times over with prospective developers submitting bids for 7.5 gigawatts. Finally, three companies were awarded the rights to develop 250 megawatts of capacity each at the lowest solar tariff of that time, Rs 2.97/kWh (¢4.4/kWh).