A USD 135m loan to support solar rooftops projects in India
With this loan, Proparco reiterates its commitment to renewable energy in India, its core priority since the start of its operations in the country in 2008, and continues to support the growth of one of its key clients. (New Delhi, 13 June 2018)
The USD 135m loan was signed by a syndicated pool of lenders led by IFC, which is providing USD 45m, with contributions of Proparco (USD 40m), FMO (USD 30m) and OeEB, the Development Bank of Austria (USD 20m). The recipient of the loan is Azure Power, one of the largest solar developers in India. The transaction aims to finance the deployment of about 175 MW of solar capacity on 500+ rooftops of commercial, industrial and government clients in the country. With Azure Power, Proparco is signing its first solar rooftop facility.
India has a huge underexploited solar potential and a high percentage of its population is not connected or poorly connected to the grid. The country has been implementing an ambitious renewable energy policy for the last ten years aiming to increase the share of renewable energies in the energy mix from 17% currently to 40% by 2030. This strategy is mainly based on solar energy, with the objective of achieving 100 GW of power capacity generated from solar energy by 2022. 40% of this objective (i.e. 40 GW) is expected to be derived from solar rooftops or small-scale solar parks, which only account for 0.5% of the energy mix (2 GW) as of now.
Azure Power, a pioneer in solar power, set up its first solar power plant in India in 2009 and the first solar rooftop of over 1 MW in 2013. To date, Azure has built and operates close to 50 solar power plants and solar rooftops projects in several regions in India with a total capacity above 900 MW. Azure Power’s power plants allow about 1,113,000 people to benefit from access to electricity.
Proparco has been a shareholder of the company since 2013 and made a second equity investment in 2015. Proparco holds 3.5% of the company’s capital for USD 17.8m.
By setting up a dedicated subsidiary, Azure Power Rooftop, and thanks to this financing, Azure aims to develop more than 175 MW of solar rooftop capacity over the next five years on 500+ rooftops of commercial, industrial and government clients in several cities and regions in the country. The power generation will be equivalent to around 228 GWh a year.
Commercial and industrial clients currently account for over 50% of the total electricity demand in India. The use of solar energy will reduce demand on the grid and provide a reliable, economically viable and environment friendly source of energy to businesses.
This project will also reduce annual CO2 emissions by 179,000 tons and is supporting India’s low-carbon path.
With this loan, Proparco reiterates its commitment to renewable energy in India, its core priority since the start of its operations in the country in 2008, and continues to support the growth of one of its key clients.