The International Finance Corporation (IFC) has committed to invest $105m in Brookfield Asset Management's 550MW solar power project in Bikaner, Rajasthan.
The investment will be channelled through long-term non-convertible debentures, specifically allocated to the project's special purpose vehicles.
The IFC, a member of the World Bank Group, is focused on supporting renewable energy initiatives that offer commercial and industrial consumers across India more competitive energy tariffs.
The move is part of India's plan to increase its non-fossil fuel capacity to 500GW by 2030, a major step in the country's green energy transition.
IFC South Asia regional director Imad Fakhoury stated: “Through our partnership with Brookfield, IFC aims to facilitate the broader uptake of clean energy by demonstrating the viability of large-scale renewable energy generation, and sale to pan-India corporate and industrial clients, through the interstate transmission system.
“The novel procurement options underscore the role of hybrid transactions in scaling up investments in renewables, increasing market competitiveness, and offsetting the energy sector's carbon footprint — key to achieving India's climate goals.”
Brookfield's solar project is set to deliver power through long-term power purchase agreements (PPAs).
The IFC's hybrid offtake structure, a first for the corporation in Asia and the Pacific, allows the project to sell power to both corporate PPA clients and the merchant market.
The solar facility will be connected to the inter-state transmission system, part of India's green energy corridor, designed to transport renewable energy across the nation.
This infrastructure is crucial for the integration of large-scale renewable energy sources into the national grid.
India's renewable energy sector has been a magnet for investments, drawing in $10bn annually from 2017 to 2022.
With projections indicating an increase to $25bn in annual investments by 2030, the sector is poised for substantial growth.
The IFC's investment is expected to contribute to this momentum, with around 20% of future investments anticipated to flow into the commercial, industrial and merchant markets.
Brookfield Renewable Power and Transition managing director Nawal Saini stated: “The corporate appetite for clean energy is growing in India, with over 5GW of renewable capacity added for the C&I sector in the last 12 months alone. By leveraging our operational expertise, we plan to continue to expand our renewable and energy transition footprint in India focusing on both state utility and C&I [commerce and industry] segments in the country.
“With a portfolio of over 25GW of renewable power assets in operation or in development across leading platforms in the country we look forward to capitalising on the scaled transition opportunities on offer in the country.”
