IFU has signed a shareholders’ agreement with ACME and UNOPS to develop and finance a 250-megawatt solar power plant in the state of Rajasthan, India. The plant will provide green electricity to the equivalent of 500,000 households and will be one of IFU’s largest renewable investments to date in terms of megawatt capacity installed. The investment is made on behalf of the Danish SDG Investment Fund, which is backed by the Danish state, large Danish pension funds, and other private investors.
More than 60 percent of the energy produced in India is based on coal and gas. Consequently, renewable energy is a high-priority sector for the Indian government to reduce CO2 emissions and meet the increasing energy demand from a growing economy, population, and urbanization.
The project will add 250 megawatts of solar power capacity to the national grid in India and provide electricity to the equivalent of 500,000 households under a 25-year PPA agreement with Solar Energy Corporation of India Limited (SECI). SECI is an AA-rated public entity owned by the government of India.
“The investment is in line with our ambition to create green, just, and inclusive societies, because it will assist India in its green transition and provide additional energy supply to more people in India enabling them to improve their livelihood,” Rahul Dubey, Investment Director at IFU
Strong co-investors
The project has been developed by Acme Solar, a leading developer and producer of solar power in India, operating a total of 2.6-gigawatt solar power in the country.
The total cost of the project is EUR 150m, and I will hold 39% ownership. IFU’s investment is made on behalf of the Danish SDG Investment Fund, which is backed by the Danish state, larger Danish pension funds, and other private investors.
UNOPS, a UN organization, will co-invest through Sustainable Investments in Infrastructure and Innovation (S3i), set up to deliver both social and environmental impact.
“Providing clean and green power is at the forefront of global commitments to address climate change. We need an urgent transition from fossil fuels to renewable energy. UNOPS is proud to support India’s climate target and all of the partners in this landmark renewable energy project,” said Grete Faremo, UN Under-Secretary-General, and UNOPS Executive Director.
“We are delighted to have had this opportunity to demonstrate our commitment to the government and people of India and show that we care and are willing to take risks while the country is working so hard to combat the devastating COVID-19 pandemic. As the world is slowly but surely recovering from this modern plague, building back green is the fastest and most optimal way to a more sustainable future,” said Vitaly Vanshelboim, Assistant UN Secretary-General and Chief Executive of Sustainable Investments in Infrastructure and Innovation (S3i).
“This is a historic partnership agreement, and we are very excited to have UNOPS S3i and IFU as our partners and co-investors in India for the development of solar projects. ACME will jointly develop world-class solar plants using the experiences of our partners in social impact measurement while optimizing operations and energy generation. This partnership is a key milestone towards ACME’s vision for developing a portfolio of 25 GW of RE projects, which comes in line with India’s plans to achieve 450 GW of REpower by 2030,” said Manoj Upadhyay, Founder, and Chairman, ACME Group.
India-Denmark Green Strategic Partnership
The project is the first renewable energy project to be signed following the India-Denmark Green Strategic Partnership, launched in September 2020 by the Indian Prime Minister Narendra Modi and the Danish Prime Minister Mette Frederiksen.
“The Green Strategic Partnership sets the direction for the green energy transition of India. Happy to see the first concrete RE project that transforms our joint commitments for a better and greener future. The ACME Solar Project is an important step where green financing from Danish stakeholders contributes to India’s ambitious RE goals,” Freddy Svane, Ambassador of Denmark to India.
In terms of megawatt capacity installed, the investment is one of IFU’s largest single renewable investments to date and will add further to IFU’s large portfolio of investments in renewable energy, which has reached a total of 2GW.
“We are very proud to have made a significant contribution to the global green transition by investing in renewable energy across several countries in Asia, Africa, and Latin America. With this first investment under the India-Denmark Green Strategic Partnership, we hope to have assisted in creating even stronger green cooperation between India and Denmark, going forward,” Reik Haahr Müller, VP Climate Investments at IFU.
