New Solar Project in Rajasthan | 31 Jan 2025
Why in News?
Jakson Green (India) and Blueleaf Energy (Singapore) have partnered to develop 1 GW of solar projects in Rajasthan, with an investment of USD 400 million (Rs 3,400 crore).
Key Points
- Project Scope & Timeline:
- The 1 GW portfolio consists of three solar projects funded through debt and equity.
- Projects include Intra State (InSTS) and Inter State (ISTS) Transmission System projects.
- 25-year Power Purchase Agreements (PPAs) secured through bidding from Rajasthan Rajya Vidyut Utpadan Nigam Ltd (RUVNL), Solar Energy Corporation of India Limited (SECI), and National Hydroelectric Power Corporation (NHPC) Limited.
- The three solar projects are expected to be progressively commissioned in 2025-2026.
- Renewable Energy Expansion Goals:
- The partnership targets adding more than 5 GW of renewable energy to the Indian grid by 2030.
- The Rajasthan projects will generate 1,800 GWh (Gigawatt hours) of green energy annually, enough to power 1.5 million households.
- Environmental Impact:
- The project will prevent 22 million tons of CO₂ emissions over 25 years.
- Equivalent to removing 5 million cars from roads.
- Job Creation & Economic Benefits:
- The initiative will create jobs during the construction and operational phases.
- Financial & Banking Support:
- Ernst & Young (EY) was engaged as the investment banker for the transaction.
- Jakson Green secured credit facilities:
- Rs 2.96 billion from First Abu Dhabi Bank (Mumbai).
- Rs 600 million from HSBC (Hong Kong and Shanghai Banking Corporation).
- Funds will support domestic & international EPC (Engineering, Procurement, and Construction) operations.
Power Purchase Agreements (PPAs)
- These are long-term agreements (typically 25 years) between electricity generators and buyers (usually public utilities).
- It involves committing generators to supply power at fixed rates, locking in significant generating capacity.
- They are inflexible and unable to adapt to dynamic market conditions.
Engineering, Procurement, and Construction (EPC) Model
- Under this model, the cost is completely borne by the government.
- Government invites bids for engineering knowledge from the private players.
- Procurement of raw material and construction costs are met by the government.
- The private sector’s participation is minimal and is limited to the provision of engineering expertise.
- A challenge of the model is the significant financial burden it places on the government.