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Rajasthan secures $500m to build solar power transmission system

ADB to provide loan to build transmission system for solar power projects in Northwest India state

The new power system will involve about 1,850km of transmission lines for solar power projects in Rajasthan

The Asian Development Bank (ADB) is to provide USD 500m to build a power transmission system needed to deliver clean electricity from solar power projects in Rajasthan, Northwest India to the state and national grids.

The new power transmission system will involve about 1,850km of transmission lines, mostly in western Rajasthan, three new 40kV substations and nine new 220kV grid substations. The funds will also be used to boost the transmission capacity of seven existing substations. In addition to serving the Bhadla solar park, the infrastructure supports solar and wind power developments in Western Rajasthan.

The Bhadla park in Western Rajasthan is the first solar park that is under development by the Rajasthan Renewable Energy Corporation, the state's renewable energy agency. It will house photovoltaic and solar thermal projects and is part of Rajasthan's aim to reach about 8,000MW of solar and wind generation capacity by 2018, largely from the private sector.

Solar energy development is also a key part of the national government's goal under the Jawaharlal Nehru Solar Mission (JNNSM) to find renewable energy alternatives to fossil fuels to meet India's fast-growing energy needs. The JNSMM, set up in 2010, aims to deploy 20,000MW of solar power capacity across India by 2022. A new target, announced last week, has been made for India to develop 10,000MW of solar power by 2017.

Len George, energy specialist in ADB's South Asia Department, said: "Boosting renewable energy is important for Rajasthan and India to meet fast-growing energy needs in a way that is kind to the environment while also improving the country's energy security by reducing reliance on imported fossil fuels. The proposed transmission investments will also support evacuation of energy produced in large renewable energy parks that bring in economies of scale compared to smaller stand-alone renewable energy projects."

The funds comprise a USD 498m multi-tranche financing facility. This includes funds from the concessional Clean Technology Fund, and a further USD 2m in technical assistance grant to finance infrastructure planning for the Bhadla park, transmission system studies and a community development plan to set up solar power electricity and clean water equipment for small communities. The government of Rajasthan and state transmission utilities will provide counterpart financing of about USD 300m.