TP Solar, a subsidiary of Tata Power Renewable Energy Limited (TPREL), will raise up to $425 million in financing from the U.S. International Development Finance Corporation (DFC) for its upcoming greenfield 4.3-gigawatt solar cell and module manufacturing plant at Tirunelveli district in Tamil Nadu.
DFC is the development finance institution of the U.S.
The plant's first module production is expected by the year end and the first cell production is expected in the first quarter of FY24.
Pending a U.S. congressional notification, this investment will support India's ambitious programme to increase renewable energy manufacturing capability to support domestic solar capacity addition as part of its global green energy transition.
"DFC's financial support of Tata Power will help secure the supply chain in the country’s journey for leadership in clean energy space," the power utility says in a stock exchange filing.
DFC partners with private sector players across the globe to finance solutions to the most critical challenges facing the developing world today. The financing support came at a time when global leaders were deliberating on energy transition and other critical sustainability challenges at the recently concluded G20 Summit in New Delhi. This financing support will contribute towards securing India's commitment to achieve 500 GW of clean energy targets by 2030, the filing says.
"We appreciate DFC's assistance for our solar cell and module production facility in Tamil Nadu. It shows the trust and belief DFC has in Tata Power's ability to set up a state-of-the-art manufacturing supply line in the country. This will go a long way in supporting the renewable and clean energy transition in the country," says Praveer Sinha, chief executive officer and managing director, Tata Power.
"The Tirunelveli manufacturing plant will integrate advanced technologies enabling the production of high wattage solar modules and cells with industry-leading efficiencies. Additionally, the facility will implement industry 4.0 standards for smart manufacturing," the company says.
The plant is expected to create over 2,000 employment opportunities directly or indirectly, with the majority of the employees being women employees from the local areas, it says.
Tata Power plans to expand its clean and green energy capacity, targeting an increase from 38% to 70% by 2030. The company is actively focusing on renewable capacity expansion and transitioning into consumer-oriented business. Currently, Tata Power's renewable portfolio stands at around 7.8 GW, with 4.1 GW operational and 3.6 GW under implementation. The company is already operating a solar cell and module manufacturing plant of 500 MW capacity, each at Bengaluru.
In the past few weeks, TPREL has inked a slew of power deals with various companies such as Chalet Hotels Ltd, Sanyo Special Steel Manufacturing India, and Neosym Industry among others.
The power producer entered into a Power Purchase Agreement (PPA) to develop a new 12MW peak on-site solar project at Tata Motors' Pune commercial vehicle manufacturing facility. The installation is collectively expected to generate 17.5 million units of electricity every year, which will meet nearly 17.2% of the annualised requirement, potentially mitigating over 12400 tonnes/kWh of carbon emission each year.