π Tender Overview
SUMMARY
STATUS
Proposed
MEMBER
India
SECTOR
Energy
E&S CATEGORY
Category C
PROJECT NUMBER
000880
FINANCING
PROPOSED FUNDING AMOUNT
USD1,100 million
FINANCING TYPE
Sovereign
TIMELINE
CONCEPT REVIEW
October 16, 2024
OBJECTIVE
To promote distributed renewable energy in Maharashtra by providing farmers with reliable daytime power through off-grid solar pumps and to enhance the climate resilience of the existing electricity distribution network through investments that will support preparation for grid solarization.
DESCRIPTION
Maharashtra, a major agricultural state in India, relies heavily on subsidized or free electricity to farmers for groundwater irrigation. Grid-connected electricity is supplied for agricultural users on a rotational basis at off-peak times. Farmers must wait for unreliable nighttime power, as daytime electricity is prioritized for higher-paying commercial and industrial users. The inability to recover costs from agricultural consumers leads to significant financial losses for Maharashtra State Electricity Distribution Company Limited (MSEDCL), limiting its ability to maintain and upgrade the electricity grid for all users.
To address these issues, the state plans to promote the adoption of off-grid solar-powered water pumps among farmers and shift the supply of grid connected pumps to solar power. This initiative aims to alleviate financial pressure on MSEDCL and reduce cross-subsidy burdens on commercial users. It will also support broader objectives of clean energy usage. The program will contribute to a more sustainable and environmentally friendly energy sector in Maharashtra by advancing solar energy adoption.
The proposed result-based program (RBP) is designed to address these financial challenges and boost solar energy integration into the grid. It consists of three key components: (i) financing 500,000 off-grid solar pumps over the next five years; (ii) strengthening the distribution system by upgrading equipment such as transformers, breakers, and feeders to optimize power distribution and accommodate the increasing influx of solar energy; and (iii) providing technical assistance and capacity building to enhance the capacity of the implementing agency and beneficiaries to deliver consistent benefits.
ENVIRONMENTAL AND SOCIAL INFORMATION
Applicable Policy and Categorization. The Bankβs Environmental and Social Policy (ESP), including the Environmental and Social Exclusion List (ESEL), will be applicable to this Program. As per the Bankβs ESP, the Project has been categorized as Category C because the potential environmental and social (ES) risks and impacts to be low and limited. However, a screening process will be designed as part of Environmental and Social Systems Assessment (ESSA), this assessment reviews the adequacy of the systems proposed to be applied to the RBP for managing ES risks and potential impacts, including the Clientβs capacity to plan, implement, monitor, and report
