IFC, a member of the World Bank Group, is providing $5 million in debt financing to Mahindra Solar One for a 5-megawatt solar power project in the Indian state of Rajasthan to expand access to clean energy in rural areas and address climate change.
The new solar photovoltaic power plant will generate enough electricity to serve about 60,000 rural homes, and is expected to avoid some 8,000 tons of greenhouse gas emissions.
Mahindra Solar One, a joint venture between the Mahindra Group and Kiran Energy, planned the project as part of the Jawaharlal Nehru National Solar Mission, a government initiative to expand solar production in India by 1,100 megawatts over the next two years.
The Rajasthan plant is expected to generate about 9 million kilowatt-hours annually to help electrify rural parts of the country. By supporting this project, IFC recognizes the potential of large-scale solar-power generation to help meet India’s enormous energy needs, agreed both Vish Palekar, Mahindra Cleantech business head, and Ardeshir Contractor, managing director of Kiran Energy.
“The project is aligned with our strategy of promoting clean growth in the region, and also complements our knowledge partnership with the government of Rajasthan,” said Anita George, IFC Director for Infrastructure in Asia. “IFC’s strategy in the solar sector is to increase energy access in emerging markets by investing in technology and scaling new business models, reducing costs so that more people use solar power.”
Much of India receives high levels of direct sunlight throughout the year, making solar power economically and logistically viable. More than 13,500 square miles of the Thar Desert in northwestern India have been set aside for solar power projects, with much of the activity located in Rajasthan.
Last year, IFC’s Advisory Services team hosted a conference, Rajasthan as a Solar Component Manufacturing Hub, to help investors and solar energy producers recognize Rajasthan’s potential as a hub for generating solar energy.