State-owned miner Coal India Ltd (CIL) has ventured into solar power and announced it has signed a first-of-its-kind power purchase agreement for the sale of 100 Megawatt (MW) solar power with Gujarat Urja Vikas Nigam (GUVNL). This project was won by the company in March in a reverse auction conducted by GUVNL. The tenure of the agreement period is for 25 years.
CIL said it is serious in its intent to pursue solar power as an alternative green energy source and for that it has rolled out a plan for 3,000 MW of solar power generation by 2024. For this, the firm plans to invest around Rs 13,500 crore in solar power projects through the company’s internal resources, Special Purpose Vehicles (SPV) and bank loans.
The project was secured with a stipulation that it enters into a PPA for the establishment of a solar power project and supplies the power generated to GUVNL within 18 months from the date of inking the PPA. The project requires capital investment of Rs 442 crore, so the project will be executed through a Solar EPC Contractor (engineering, procurement and construction).
To facilitate this, CIL has already issued a tender in advance for finalizing a solar EPC contractor which is in an advanced stage. The project will be executed within one year from the date of placement of the work order. Also, the company very recently has added two more fully-owned subsidiaries to its fold. These will function as SPVs to carry the company’s stated objectives.