IFC ADVISORY SERVICES Climate Change Stories of Impact This series provides examples of our impact, expertise and lessons learned working with clients and partners. Public-Private Solar Project Generates Power, Reduces Carbon Emissions in India RESULTS & IMPACT* The state of Gujarat in India, which enjoys more than  12,000 people will benefit from improved energy services at 300 sunny days a year, has a long-term goal of affordable prices with virtually no state making its capital, Gandhinagar, a solar-powered subsidies. city. Supported by the Indian government’s  The transaction will attract $15 million commitment to reduce carbon emissions, the state in private investment to the region. plans to install 500 megawatts (MW) of solar capacity  The solar project will provide the city by March 2014. As a first step, Gujarat turned to IFC government of Gujarat with a net to help with an innovative 5 MW rooftop solar project revenue stream of $400,000 annually for 25 years. to add power generating capacity, develop contractual models for further solar projects, and  The project will reduce the city's carbon emissions by 6,000 tons demonstrate the technical and economic feasibility of annually. rooftop-based solar power.  The solar project will demonstrate the technical, regulatory, and financial viability of rooftop solar panels, which “IFC enabled us to bring the best practices to the project, as well as will facilitate the expansion of solar the best technology partner. The proposal attracted tremendous power in Gandhinagar and elsewhere response and because we went with the best practices, within six in India. As a result of this initiative, months to a year, we saw that rooftops across the city were full of IFC has already signed mandates to solar panels … The carbon footprint can be completely reduced, advise on similar initiatives in five other cities in Gujarat. and we can see climate change effects cut back.” *As of December 2012 — Mr. D.J. Pandian, Principal Secretary in the Energy and Petrochemicals  Department for the Government of Gujarat In partnership with Finland and the Netherlands IFC ADVISORY SERVICES CLIMATE CHANGE The Opportunity Our Approach The state of Gujarat, located in western India, has embraced Gujarat’s Department of Energy and Petrochemicals appointed the idea of renewable energy. The state government plans to IFC its lead transaction advisor to execute the pilot public- develop 500 MW of solar power capacity by March 2014 to private partnership project in rooftop-based solar power. meet its energy needs, and to make its capital, Gandhinagar, a IFC’s Advisory Services in Public-Private Partnerships and model solar city. However, many technical, regulatory, and IFC’s Sustainable Business Advisory leveraged their commercial challenges confront it. respective sector knowledge to successfully execute the project, lay the foundation for a long-term business To pave the way for large-scale solar power, the government relationship, and enhance IFC’s position as a global thought sought private sector participation to finance and build two 2.5 leader in this space. Besides providing transaction advice, MW pilot solar projects in Gandhinagar that will use rooftop IFC’s role included technical, legislative, analytical, and solar panels to generate a total of five MW annually. Although marketing support. Specifically, IFC’s support included: modest, the project will address issues constraining the adoption of solar power, provide extra power capacity to the • Analyzing the technical options for solar panels, for grid, and contribute to the reduction of greenhouse gas example, using concentrated solar power or photovoltaic solar emissions. panels; resolving connectivity issues; and determining The government of Gujarat needed assistance in selecting the maintenance requirements. IFC recommended using solar most appropriate technology, and in concluding suitable panels mounted on rooftops agreements with private investors and the power procurer. • Reviewing social, legal, and commercial issues related to renting rooftop space from residential and commercial buildings, and then developing terms for the rental agreements • Organizing an investors’ conference to discuss the project with potential investors and get their feedback. More than 40 firms attended, demonstrating strong interest in the project • Leading discussions with the client and the local private distribution company, Torrent, on the power purchase agreement. IFC helped broker the terms so that Torrent would purchase electricity generated by the rooftop panels. Azure Power and SunEdison each won 25-year concessions for the 2.5 MW pilot solar projects. The two developers will install solar photovoltaic panels on the rooftops of public buildings and private residences and connect them to the grid. IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries. REGION: SOUTH ASIA | COUNTRY: INDIA | STRATEGIC PRIORITY: CLIMATE CHANGE | BUSINESS LINES: SUSTAINABLE BUSINESS ADVISORY, PUBLIC-PRIVATE PARTNERSHIPS CONTACT Minakshi Seth | New Delhi, India 5741+1058 / 91-11-4111-1058 | MSeth@ifc.org Ifc.org/sustainablebusiness June 2013