The company had won a 100 MW solar power project 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.
The firm plans to invest around Rs 13,500 crore in solar power projects through company’s internal resources, Special Purpose Vehicles (SPV) and bank loans.
“Solar will replace coal as a key energy provider in future and we are laying the groundwork to remain relevant in the country’s energy sector. We plan to venture into solar power generation in a big way,” a senior executive of CIL said.
The miner secured the project work with a stipulation that it enters into a PPA for the establishment of a solar power project and supply the power generated to GUVNL within 18 months from the date of inking the PPA.
“To come up at a capital investment of at Rs 442 crore, CIL will execute the 100 MW project through a Solar EPC Contractor (engineering, procurement and construction),” the company said.
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.
Moreover, in order to further its prospects in the renewable energy sector, CIL has added two more fully-owned subsidiaries to its fold. These will function as SPVs to carry the company’s stated objectives.
The two SPVs that were incorporated are CIL Navikarniya Urja Limited and CIL Solar PV Limited. Both the registered entities will be situated in West Bengal.