Indian Renewable Energy Development Agency Limited (IREDA) has signed an agreement with Rewa Ultra Mega Solar Limited (RUMSL) to finance two major solar parks in the state of Madhya Pradesh with a first loan of INR2.1 billion (US$33 million).
Late last year, the World Bank agreed with the Ministry of New & Renewable Energy (MNRE) and IREDA to channel US$100 million into financing ultra-mega solar parks in India, of which 38 have been sanctioned to date, according to a recent posting by MNRE. The RUMSL loan is the first from the World Bank’s line of credit to be sanctioned by IREDA, the organisation responsible for dispersing the financing.
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RUMSL is a joint venture between the state Discom Madhya Pradesh Urja Vikash Nigam Limited (MPUVNL) and the Solar Energy Corporation of India (SECI) whose role is to implement the solar parks, namely Rewa (750MW) and Mandsaur (250MW).
The loan to RUMSL includes a fixed interest rate of 8.5% per annum for the entire loan tenure, moratorium from principal repayments up to five years and a loan repayment period of up to 20 years.
K.S. Popli, CMD, IREDA, thanked the Department of Economic Affairs (DEA) for reducing the Sovereign Guarantee fee to 0.5%, which he said would also help in providing similar solar park support in other states.
Upendra Tripathy, interim director general, International Solar Alliance, highlighted the unique payment security mechanism for the Rewa solar projects, which led to them achieving some of the lowest ever solar tariffs in India in early 2017, reaching as low as INR3.30/kWh (US$0.052) on levelised basis.
Out of the total power proposed to be generated at Rewa solar park, 24% will be purchased by Delhi Metro Rail Corporation and the remaining 76% by Madhya Pradesh Power Management Company (MPPMCL).