ADB Approves $434.25M Loan to Boost Renewable Energy Capacity in Assam, India

New Solar Project Aims to Enhance Energy Security and Attract Private Investment in Renewable Sector.

The Asian Development Bank (ADB) has approved a loan of $434.25 million to bolster renewable energy capacity and enhance energy security in Assam, India. This initiative addresses the urgent need for increased renewable energy to meet growing demand and reduce reliance on fossil fuels.

Jiwan Acharya, ADB Principal Energy Specialist, emphasized the significance of this project, stating, "Addressing the renewable energy capacity shortage in Assam is crucial to meet growing demand and reduce dependency on fossil fuels. This project will help Assam develop a renewable energy roadmap and increase its solar energy capacity to achieve its target of 3,000 megawatts (MW) by 2030."

The Assam Solar Project will involve the construction of a grid-connected solar photovoltaic (PV) facility in the Karbi Anglong district, designed to produce 500 MW of solar energy. To ensure grid stability and meet peak power demand, the project will also support the development of a grid-connected battery energy storage system. This storage system will be created through a joint venture between the Assam Power Distribution Company Limited (APDCL) and the Oil and Natural Gas Corporation Ltd. (ONGC), alongside Tripura Power Company Ltd..

ADB aims to attract private sector investment in renewable energy by enhancing the state's public-private partnership (PPP) framework, thereby increasing its capacity to develop and manage renewable energy PPP projects. The project will also establish a PPP agreement to develop an additional 250 MW solar PV facility in the same district.

Improving Electricity Distribution

In addition to increasing solar capacity, the project will enhance electricity distribution in the vicinity of the solar PV facility and surrounding rural areas. This will involve replacing overhead power distribution lines with aerial-covered conductor cables and installing new distribution transformers, ensuring more reliable electricity supply.

Technical Assistance and Community Engagement

To further support project implementation and community capacity building, ADB will provide an additional $1 million technical assistance grant from its Clean Energy Fund under the Clean Energy Financing Partnership Facility. This grant will aid in raising awareness and building the capacity of the APDCL and nearby communities regarding the benefits of renewable energy and efficient energy use.

The approval of this substantial loan marks a significant step toward transforming Assam's energy landscape, aligning with India's broader goals of increasing renewable energy capacity and enhancing energy security. By fostering public-private partnerships and investing in infrastructure, the Assam Solar Project is poised to create a more sustainable and resilient energy future for the region.