Supporting India in its energy transition efforts, the International Finance Corporation (IFC) has committed US$105 million to help finance a 550-megawatt solar power venture in Bikaner, Rajasthan.

The solar project, being developed by New York headquartered Brookfield Asset Management, will receive the US$105 million through long-term non-convertible debentures allocated to the project's special purpose vehicles.

This is IFC's first investment in Asia and the Pacific using an innovative hybrid offtake structure where the project sells the generated power to commercial and industrial (C&I) consumers under long-term corporate power purchase agreements and the merchant market via exchange.

The project will be connected to the inter-state transmission system section of India's green energy corridor.

India has pledged to increase its non-fossil fuel capacity to 500 gigawatts by 2030. Its renewable energy sector has already attracted about US$10 billion in annual investments between 2017 and 2022 and is expected to generate annual investments of US$25 billion through to 2030. Of this, around 20% is estimated to be directed towards the C&I and merchant market.

Imad N. Fakhoury, IFC's regional director for South Asia, says: "The novel procurement options underscore the role of hybrid transactions in scaling up investments in renewables, increasing market competitiveness, and offsetting the energy sector's carbon footprint, key to achieving India's climate goals."

Since 2010, IFC has invested US$2.79 billion in multiple projects to strengthen the renewable energy and energy efficiency sectors in India.