The 20-year loan has been fixed at 11% annual interest and the power producer will only have to start repaying the loan after the project has been commissioned. After its commissioning, it will benefit from a one-year moratorium during which it will have no payment to make to the lender.
The storage project, wholly owned by Greenko, is being constructed at a cost of Rs 7,600 crore, with the debt component financed by PFC, a public sector company. The remaining funds for the construction will be invested by Greenko in the form of equity.
An off-river energy storage project involves the construction of two large water reservoirs at opposite ends of a gradient over a stretch of land. During the day, the storage facility uses solar energy to pump water from the lower reservoir to the top. At night, water is pumped out to produce hydropower. The capacity of the storage facility is 1,200 megawatts. Such storage facilities exist in hydroelectric projects located along rivers, but this will be the first to be built on a land mass.
Greenko and PFC did not respond to ET’s questions.
The storage facility will serve the spot market, public electricity distribution companies and commercial customers. Commercial customers will represent less than 20% of the activity.
Around the storage facility, multiple solar and wind energy projects are under development. They could also purchase storage capacity at the facility. Greenko itself is developing around 900 megawatts of power generation projects in the surrounding area with ArcelorMittal. Other private actors like Ayana Renewable are also building projects in the region.
Greenko, majority owned by Singapore’s sovereign wealth fund
, is developing approximately 8 gigawatts of renewable energy capacity. It counts among its other investors the Japanese Orix and Abu Dhabi Investment Authority. The founders, Anil Kumar Chalamalasetty and Mahesh Kolli, hold just under 10% of the company’s capital.