Adani Enterprises Ltd plans to build India’s largest solar power facility, with 10,000 megawatts of capacity, in a boost for Prime Minister Narendra Modi’s effort to promote renewable energy.
Adani Enterprises, controlled by billionaire Gautam Adani, and state-run Rajasthan Renewable Energy Corp. will form a venture to set up the solar park in the western state of Rajasthan, according to a stock exchange statement Monday, Feb. 9. The park will include generation projects and a manufacturing unit for solar modules, parts and equipment, the companies said, without giving any details of investments.
India is seeking to reduce its reliance on fossil fuels as the United Nations pushes all countries to adopt targets in time for a climate summit in Paris in December. India’s emissions are the third-highest in the world, behind the US and China.
“The policy environment and investment flows have become more favorable in the past few months, which is positive for such ambitious projects,” said Bharat Bhushan Agrawal, an analyst at Bloomberg New Energy Finance in New Delhi. “Such projects face many challenges and timely financial closure will be the key to their success.”
The park may cost an estimated 650 billion rupees ($10.5 billion), based on a thumb-rule for solar plants, Agrawal said.
Adani Enterprises shares gained as much as 4.1 percent to 633.90 rupees and traded at 627.90 rupees as of 12:08 a.m. in Mumbai. The stock has gained 29 percent this year, compared with a 3.5 percent increase in the benchmark S&P BSE Sensex.
Joint investment
In January, Adani Enterprises signed a pact with SunEdison Inc. to jointly invest $4 billion in setting up India’s biggest solar panel factory.
Last year, Modi boosted India’s national solar capacity target by fivefold to 100 gigawatts by 2022. While that matched China’s goal for 2020, India has a much bigger leap to make than its northern neighbor.
Adani’s coal-fired plants have struggled to run at full capacity because of a fuel shortage. Almost one-fifth of its total thermal capacity was under outage as of Feb. 3, according to the power ministry’s Central Electricity Authority.
Adani describes itself as India’s largest private-sector thermal power producer, with 9,280 megawatts of installed capacity. That includes 40 megawatts of solar generation capacity in Gujarat state.
China has 33.4 gigawatts of solar capacity installed and is home to most of the top 10 panel makers worldwide. India has 3.3 gigawatts of capacity and no major PV manufacturers, according to Bloomberg New Energy Finance.
