Microfinance Focus, September 15, 2011: The Asian Development Bank (ADB) is providing a $100 million loan to the state of Gujarat in India to finance the Gujarat Solar Power Transmission Project. This is intended to accelerate the rollout of new large-scale solar power facilities.

The ADB funding will be used for a substation, transmission lines and other equipment to collect and distribute solar power generated by plants in the Charanka Solar Park in Gujarat’s Patan district. The facilities will make it more cost effective for private companies to set up sizeable solar energy generating plants, which will give the sector a significant shot in the arm. Along with physical infrastructure, the project will provide vocational skills training for up to 300 people in target areas, with 30% of them women, as well as energy-based livelihood programs for up to 100 poor women.

Charanka, which is targeting output of over 500 megawatts (MW), is one of a number of large scale solar energy parks that Gujarat plans to build to meet rising demand for power and to help reduce its use of fossil fuels. The parks will provide developers with the necessary permits and services to fast track the rollout of generation plants. They will also help the Government of India realize its goal of building solar facilities with total generating capacity of 20,000 MW by 2022.

Solar power is becoming the answer to the problems we faced by climate change. “By putting in reliable power transmission facilities in the solar park, ADB will help draw in private sector developers, while providing a model which can be replicated to scale up solar power in a significant manner in India,” said Naoki Sakai, Senior Climate Change Specialist, ADB.

India is bestowed with solar irradiation ranging from 4 to 7 kWh per square meter per day across the country, with western and southern regions having higher solar incidence. India has initiated steps to tap into and develop the large potential for solar energy based power generation. In 2010, the GOI launched the Jawaharlal Nehru National Solar Mission (JNNSM) to facilitate extensive solar power development. JNNSM envisages setting up utility scale solar power generation plants through the promotion and establishment of solar parks with dedicated infrastructure by state governments, among others, the governments of Gujarat (GOG) and Rajasthan (GOR).

GOG, taking advantage of the favorable policy regimes and high solar irradiation in the state, launched the Solar Power Policy in 2009 and proposes to establish a number of large-scale solar parks starting with the Charanka solar.