IFC commits $105m investment in Brookfield’s solar project in Rajasthan

The International Finance Corporation (IFC), part of the World Bank Group, has committed $105 million to support a significant solar power project in Bikaner, Rajasthan, developed by global asset management firm Brookfield Asset Management. This initiative marks a critical step in scaling India’s renewable energy capacity, specifically targeting a 550 MWp solar project that aims to bolster the country’s green energy output and sustainability goals.

IFC’s investment through long-term non-convertible debentures will fund special purpose vehicles assigned to execute the project. This financing approach is part of IFC’s broader strategy to encourage substantial private sector investment in renewable energy. The project will utilize an innovative hybrid offtake structure, a first for IFC in Asia and the Pacific, combining long-term corporate power purchase agreements (PPAs) with sales in the merchant market through exchanges. This structure will enable the delivery of solar power to commercial and industrial (C&I) consumers across India at competitive tariffs, contributing to national decarbonization efforts.

Connected to the inter-state transmission system, part of India’s green energy corridor, the solar plants are anticipated to reduce greenhouse gas emissions by 804,408 tons of CO2 annually. This mitigation is equivalent to removing over 173,680 cars from the roads each year, significantly impacting India’s ecological footprint.

India has set an ambitious target to increase its non-fossil fuel power capacity to 500 GW by 2030. The renewable energy sector in India attracted approximately $10 billion annually in investments from 2017 to 2022 and is projected to draw $25 billion yearly by 2030. About 20 percent of this investment is expected to support the C&I and merchant market, underscoring the growing corporate demand for clean energy solutions.

Imad N. Fakhoury, IFC’s Regional Director for South Asia, highlighted the project’s strategic importance: “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. This project exemplifies how innovative financing solutions can increase market competitiveness and contribute to achieving India’s climate goals.”

Nawal Saini, Managing Director of Renewable Power & Transition at Brookfield, also expressed optimism about the collaboration: “We are pleased to collaborate with IFC, sharing a common goal through this strategic partnership. 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 segments.”

This strategic partnership between IFC and Brookfield is set to drive forward India’s renewable energy initiatives, offering new models for financing and project implementation that could serve as benchmarks for future projects globally. As India continues its transition to a greener energy paradigm, such collaborations will be crucial in meeting both energy needs and environmental commitments.