Reliance Power has raised external commercial borrowings of around Rs 1,588 crore ($302 million) to fund its 100 MW solar power project in Rajasthan.
The company has achieved financial closure for the largest concentrated solar power (CSP) project at Dhursar in Rajasthan’s Jaisalmer district. The 100-MW plant is being built adjacent to India’s largest thin film PV Project, the 40-MW photovoltaic project, commissioned by the company in March.
Rajasthan Sun Technique, a wholly owned Reliance Power subsidiary, is developing the CSP project at a total cost of over Rs 2,250 crore ($400 million), mostly through ECBs.
The Asian Development Bank is financing the CSP project, along with Dutch development bank FMO, US-EXIM and Axis Bank.
The Anil Dhirubhai Ambani Group company had recently signed a pact with the funding majors to raise the foreign debt.
A Reliance Power spokesperson confirmed the development. He said the company's CSP project would be the single largest solar project in the world. With the entire financing in place, the project work is progressing well and the plant is to be commissioned by next year.
“Our Dhursar site has the highest solar radiation in the country for the development of CSP project,” he added.
Executives familiar with the deal told Business Line that the entire $302 million debt financing was based on ECBs resulting in huge savings in terms of interest costs and recent changes in withholding tax.
“The project is set to benefit from the recent reduction in withholding tax on ECBs from 20 per cent to 5 per cent,” they added. Loan documents were signed recently.
Reliance Power had awarded the solar field contract to Areva Solar Inc as its solar technology partner.
The project uses the Compact Linear Fresnel Reflector technology developed by Areva Solar.
CSP plants produce electric power by converting the sun’s energy into heat using various mirror configurations.
A conventional steam turbine generator then converts this heat-energy into electricity. The steam turbine and generator for the project have been provided by Siemens.
The CSP plant is being developed under the Jawaharlal Nehru National Solar Mission, which has set a target of 20 GW solar power by 2022.