Rajasthan : To help boost private investment in renewable energy, multilateral lending agency ADB has announced USD 103 million loan to Reliance Power for setting up a 100-MW solar plant in Jaisalmer district of Rajasthan.

“I would like to to inform you that ADB has just agreed to extend financing for Reliance Power’s 100-MW concentrated solar thermal plant which will be one of the largest solar power generation facilities in India and Asia as well,” ADB Director General (Regional and Sustainable Development Department) S Chander said on Tuesday.

He was addressing the inaugural session of the fourth Asia Solar Energy Forum here, which is being attended by several public and private sector experts, investors, and companies. The plant, which is expected to be completed in May, 2013, will cost around USD 415 million.

Besides ADB, other bilateral agencies and local lenders will provide funds for the project. It will be the first solar energy plant built by Reliance Power, which is a listed company of the Reliance ADA Group.

Under the government’s ambitious Jawaharlal Nehru National Solar Mission (NSM) that started in January, 2010, the country aims to have 2,000 MW of installed solar power generation capacity by 2013, which would be further increased to 10,000 MW by 2017 and to 20,000 MW by 2022.

Reliance Power was one of the successful bidders to develop 470 MW of concentrating solar power capacity under the first phase of the NSM.

The plant will be located near the village of Dhursar in the Jaisalmer district of Rajasthan, which is about 180 km fromJodhpur.

The site has one of the highest levels of direct sunlight in the country. The plant is estimated to avoid more than 2.5 lakh tonnes of carbon dioxide emissions every year, compared to the energy produced by a conventional fossil fuel plant.

The project will share a transmission line with the Reliance Power’s existing 40 MW Dahanu solar power plant which is also partly financed by the ADB.

“This 100-megawatt plant will help meet growing energy demand in India in a way that avoids emission of harmful greenhouse gases,” said Michael Barrow, Director, ADB’s Private Sector Operations Department.

He further said, “We hope that the success of this project will spur others to invest in the solar energy sector, which has massive potential in India.”

According to the Asian Development Bank, it will be one of the largest solar plants in India and the loan marks ADB’s first-ever financing for a concentrating solar power project.

Concentrating solar power captures solar energy to convert water into steam, which in turn drives a steam turbine to produce energy.

Photo-voltaic plants convert sunlight into electricity through solar panels using semiconductors.

ADB is supporting the development of solar energy in Asia, as part of its goal of promoting environmentally sustainable economic growth.

Under its Asia Solar Energy Initiative, announced in May 2010, ADB aims to commission or support 3,000 MW of solar power capacity in developing member countries by May 2013.