Mumbai : The Jawaharlal Nehru Solar Mission's plan for the deployment of 20,000 Mw of solar power by 2022 needs an investment of Rs 3 lakh crore, based on a capex of Rs 15 crore per Mega watt (Mw).

Of the total amount, an initial investment of Rs 16,500 crore is required for 1,100-Mw grid connected to solar plants and 200-Mw capacity equivalent off-grid solar applications till 2012-13. Farooq Abdullah, minister for new and renewable energy, told Business Standard that the proposed capacity addition would be funded through multiple instruments, including long-term loans from banks and financial institutions, and funds from various infrastructure institutions like Indian Infrastructure Finance Corporation and Power Finance Corporation. Besides, the developers could access funds from International Finance Corporation and Asian Development Bank.

For the development of off grid solar generation projects, the state-run Indian Renewable Energy Development Agency would provide finances at 5% rate of interest. Abdullah, who was speaking on the sidelines of a solar energy conference here, said that banks would be asked to provide loan for 25 years. "In fact, various funds from international market are quite keen to provide funds for the proposed solar capacity addition. The budget has already offered financial incentives which will help bring down the cost."

The minister said the objective of the solar mission is to promote Indian manufacturing units, bring down costs, and create grid parity. Abdullah advised Indian companies not to procure "cheap" Chinese equipment, but produce quality equipment which should last at least for 25 years. Abdullah said the Centre has revised its decision to create 1,300 Mw in three years. "Instead of an original plan of a combination of 60% through solar thermal and 40% through photovoltaic (PV), it has been decided to create 60% based on PV and 40% through solar thermal. This is necessitated in view of lack of availability of adequate manufacturing capacity for solar thermal generation. However, the government wants India to become a leader in the solar thermal generation," he added.

Moreover, the minister informed that Clinton Foundation has proposed the development of solar projects of 3,000 Mw each in Gujarat and Rajasthan. Abdullah said the focal point, for the next 3 years, would be NTPC Vidyut Vyapar Nigam (NVVN), which is the power trading arm of NTPC. The government has designated NVVN for the purchase of solar power generated by independent solar power producers, at rates fixed by the Central Regulatory Electricity Commission and for a period specified by the latter. The Centre will provide equivalent Mw of power from the unallocated quota of NTPC for bundling with solar power.