Rajasthan

• 31 Jan 2025

New Solar Project in Rajasthan

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.