ADB loans $100 million to India’s ACME to roll Out 200 MW of solar power

The Asian Development Bank (ADB) is extending loans of up to US$100 million to help India’s pioneering private sector solar power developer, the ACME group, finance badly needed new solar plants.

Isabelle Chauche, Investment Specialist in ADB’s Private Sector Operations Department, stated:

“Solar and other renewable power sources are essential for India’s energy diversification and security, and for underpinning the country’s long term growth. ADB’s support for ACME will help break down barriers for more private sector investment, including foreign direct investment, in clean energy infrastructure.”

ACME Solar Energy Private Ltd, 50% owned by two leading French renewable energy companies, Électricité de France Energies Nouvelles and EREN, and 50% by the ACME group, has a pipeline of solar projects which will generate more than 350 MW of clean power.

ADB will support the development and commissioning of solar projects with capacity of 200MW, with half or 100 MW already awarded under the Jawaharlal Nehru National Solar Mission phase 2. Others are still to be identified.

Those approved to date are located in the Jodhpur district of Rajasthan state, where solar irradiance levels are among the highest in the country. The projects will rely on solar panels from a range of ADB-approved suppliers and sell the power to the Solar Energy Corporation of India at a fixed tariff of Rs5.45 per Kwh over the next 25 years. ADB financing for those projects has reached financial close.

The additional projects, to be financed by ADB, will be selected on criteria, including long term offtake of generated electricity, financial viability, and compliance with environmental and social safeguards. The 200MW of combined generating capacity will provide 380,000 megawatt-hours of electricity a year, avoiding around 280,000 tons of carbon dioxide which would otherwise have been emitted from fossil fuel power generators.

This financing underlines ADB’s strong commitment to the Indian solar sector’s development, and in particular the Jawaharlal Nehru National Solar Mission. As of September 2014 the total installed solar power capacity in India was 2,766 MW. The program is targeting installed generation capacity of 22,000 MW of solar power in India by 2022.

Aside from ADB, International Finance Corporation and commercial banks will provide estimated loans of $100 million and ACME Solar Energy Private Ltd estimated equity of $65 million, for a total investment cost of $265 million.