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The government of the state of Jammu and Kashmir signed a memorandum of understanding (MoU) with the ministry of new and renewable energy (MNRE) to build multi-gigawatt volumes of solar power, according to Analysts Bridge to India and The Economic Times of India.

The MoU is for 7.5GW of solar installations, with 5GW in the region of Ladakh and 2.5GW in the town of Kargil.

Signing the MoU last week were the union joint secretary for MNRE, Tarun Kapoor and Jammu and Kashmir state commissioner secretary for science and technology, Bipul Pathak.

The union minister for MNRE, Farooq Abdullah was also in attendance at the signing last week, highlighting the chosen areas’ high solar potential.

The deal also supports the interim budget announced last month by India’s finance minister, Shri Chidambaram. The budget included 2GW worth of new large-scale solar projects.

The finance minister said following the success of India’s Jawaharlal Nehru National Solar Mission (JNNSM), the government wanted to see four “ultra mega solar power projects” each with a capacity of over 500MW in 2014-15. According to local press reports, the projects were planned to be in Rajasthan, Gujarat, Jammu and Kashmir and form part of the JNNSM.

However analysts have questioned whether projects proposed will go ahead promptly, as there are concerns over the likely speed of payouts under the viability gap funding process, which was put in place to attract investors..

Plans are already underway in India for a multi-stage 4GW ultra mega solar power project in Rajasthan. Six companies involved in the project signed a memorandum of understanding on the project earlier this year.