The International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, has announced a significant commitment of $105 million (approximately Rs 870 crore) to Brookfield’s Bikaner Solar Power project through long-term non-convertible debentures. This investment, as stated by IFC, will bolster India’s renewable energy capacity and support its ambitious climate goals.
Boosting India’s Renewable Energy Capacity
The Bikaner Solar Power project, a 550 MW initiative located in Bikaner, Rajasthan, is set to play a crucial role in enhancing India’s renewable energy infrastructure. The project’s financing is structured through special purpose vehicles, ensuring a focused and efficient allocation of resources.
With this commitment, Brookfield aims to deliver solar power to commercial and industrial (C&I) consumers across India at competitive tariffs. This will be achieved through long-term power purchase agreements (PPAs), thereby contributing significantly to India’s decarbonisation efforts.
Innovative Hybrid Offtake Structure
This investment marks IFC’s first foray in Asia and the Pacific utilizing an innovative hybrid offtake structure. Under this model, the power generated by the project will be sold to C&I consumers under long-term corporate PPAs, as well as in the merchant market via exchange. This dual approach not only ensures a steady demand for the generated power but also maximizes revenue potential.
The project will be integrated into the inter-state transmission system, a vital part of India’s green energy corridor. Annually, the solar plant is expected to mitigate greenhouse gas (GHG) emissions by 804,408 tons of CO2, equivalent to removing over 173,680 cars from the road each year.
India’s Green Energy Transition
India is at the forefront of a global green transition in the energy sector, with a pledge to increase its non-fossil fuel capacity to 500 GW by 2030. The country’s renewable energy sector has already attracted approximately $10 billion in annual investments between 2017 and 2022. Looking ahead, it is projected to generate annual investments of $25 billion through 2030, with about 20 percent expected to be directed towards the C&I and merchant market.
Partnership for Broader Clean Energy Adoption
Imad N. Fakhoury, IFC’s Regional Director for South Asia, emphasized the strategic importance of this partnership. “Through our collaboration with Brookfield, IFC aims to facilitate the broader uptake of clean energy by demonstrating the viability of large-scale renewable energy generation and its sale to pan-India corporate and industrial clients via the interstate transmission system,” he said.
Brookfield, with a robust portfolio of over 25 GW of renewable power assets in operation or development across various leading platforms in India, is poised to leverage this opportunity to drive the nation’s energy transition. Nawal Saini, Managing Director of Renewable Power & Transition at Brookfield, expressed optimism about capitalizing on the scaled transition opportunities in the country.
Brookfield Asset Management
Brookfield Asset Management Ltd is a leading global alternative asset manager, overseeing assets worth over $925 billion across various sectors, including renewable power and transition, infrastructure, private equity, real estate, and credit. This extensive experience positions Brookfield as a key player in driving forward large-scale renewable energy projects such as the Bikaner Solar Power project.
Conclusion
The IFC’s $105 million commitment to the Bikaner Solar Power project is a pivotal step towards achieving India’s renewable energy and climate goals. Through innovative financing structures and strategic partnerships, projects like this are set to pave the way for a greener, more sustainable energy future for India.
