The 750 MW Rewa solar project in Madhya Pradesh, which boasts of a three-tier payment security mechanism and optimal power scheduling arrangement, is expected to achieve commercial closure soon.
Power purchase agreements (PPAs) for one of the “world’s largest single-site solar project” are set to be signed next week, a senior official of the International Finance Corporation (IFC), which is the lead transaction adviser, said.
The project is being implemented by Rewa Ultra Mega Solar Power Ltd — a joint venture between Madhya Pradesh Urja Vikas Nigam Ltd (MPUVN) and the Solar Energy Corporation of India.
“PPAs will be signed on April 17… Then, we will achieve commercial close. That will be the first step of the development of the project,” Bhanu Mehrotra, global sector lead for solar PPPs Advisory at IFC, said.
After achieving commercial close, the project is expected to have full capacity operations in 18 months, he told PTI.
Madhya Pradesh Power Management Corporation Ltd and Delhi Metro Railway Corporation would purchase power produced by the plant.
Delhi Metro’s off-take would be 22 per cent of the total energy produced at the plant while 78 per cent would be utilised by the state utility.
In a first of its kind in the domestic solar sector, IFC has come out with unique propositions for the projects such as three-tier payment security mechanism and optimal power scheduling arrangement.
To guard against payment defaults, a three-tier mechanism would be in place for the project. Apart from Letter of Credit (LoC), a payment security fund would be there and in the final level, the state government would be obliged to pay in case of pending dues.
Under the first of its kind power scheduling arrangement, Delhi Metro can utilise the power as per its demand while the state utility would absorb the rest, Mehrotra said.
Among others, there is also an arrangement whereby developers would be compensated if the transmission system to carry electricity is not available beyond a certain threshold level.
“We have been at the fore front of solar power advisory as well as investments globally and in India,” Mehrotra said.
According to him, IFC has already been engaged by the Odisha government for 1,000 MW of solar power.
Part of the World Bank Group, IFC is a leading development institution focused on the private sector in emerging markets.