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Bhopal

Updated on: Tuesday, November 23, 2021, 10:25 PM IST

Madhya Pradesh: State govt offers guarantee to promote solar energy

Supply from renewable energy to be enhanced by 40% by 2030.
Cabinet meeting |

Cabinet meeting |

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Bhopal (Madhya Pradesh): The state cabinet on Tuesday approved a proposal wherein state government will offer guarantee to solar projects set up in the state.

An example is minimum tariff received in tender issued for more than 10 times the total capacity of 1500 MW of Agar-Shajapur-Neemuch Solar Park, as per government spokesman.

Due to this, the lowest solar tariff has been achieved in the country. The guarantee of the state government has resulted in several benefits. The project got loans at low interest due to payment security.

International developers were interested in setting up the project, as they could get loans from foreign institutions at low interest rates. Due to low payment risk, developers are willing to set up the project even at low return, that is, low share capital return. In view of guarantee of state government in multi-layered payment security, less working capital is required. Interest on working capital is higher than term loan. Therefore, due to availability of state guarantee, the additional interest on working capital cost has been saved.

Renewable energy capacity of about 5100 MW capacity has been established in the state till September 2021. It has solar power capacity of 2432 MW and wind power capacity of 2444 MW. About 21 per cent of the total power supply available in Madhya Pradesh comes from renewable energy.

In its continuous efforts to reduce carbon emissions, the state government is committed to increase the share of electricity supply from renewable energy to 40 per cent by 2030. In the same context, the Solar Energy Corporation of India and Madhya Pradesh Urja Vikas Nigam’s joint venture company Rewa Ultra Mega Solar Limited (RUMSL) had invited a tender on January 26, 2020 to develop Agar-Shajapur-Neemuch Solar Park of 1500 MW capacity.

With the establishment of the proposed solar park project, a total of 3775 million units of energy will be generated and the state will get about 3018 million units of solar power and the rest will be given to Indian Railways.

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Published on: Tuesday, November 23, 2021, 10:25 PM IST
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