5 November 2020

Developing a standardised procurement process that can be replicated across multiple solar projects

5 November 2020

REWA Solar Park PPP


  • The planned 750MW Rewa Solar Project in the state of Madhya Pradesh will be one of the world’s largest solar photovoltaic (PV) projects
  • It plans to sell electric power not only in Madhya Pradesh, but also across state boundaries under India’s Open Access rules


  • There were various barriers to private investment e.g. complex regulatory environments, lack of a robust pipeline of projects that reduced investor appetite for India's infrastructure projects
  • Although solar plants can be profitable, investors were concerned with inadequate infrastructure, challenges in obtaining land, and a lack of familiarity with the sector


  • “Scaling” is an approach by the International Finance Corporation (IFC) to develop a robust PPP model for a single deal which can then be replicated. The Rewa project was a part of the IFC's approach, which included financial support for environmental and social management in addition to the direct support of the REWA project
  • The REWA Solar Park received World Bank and Clean Tech Fund (CTF) financing on favorable terms

Stakeholders Involved

  • IFC – Lead transaction adviser
  • Rewa Ultra Mega Solar Limited Company (RUMSL) –
    Project implementing agency which is a 50:50 joint venture between Madhya Pradesh Urja Vikas Nigam Limited (MPUVN) and Solar Energy Corporation of India (SECI)
  • Madhya Pradesh Power Management Company Limited (MPPMCL) and Delhi Metro Rail Corporation (DMRC) – Offtaker purchasing the generated power


  • The project was split into three different units of 250MW each which were processed simultaneously, proving the bankability of the scaling concept
  • Favorable World Bank and CTF loan terms helped reduce electricity tariffs by about 0.07 US¢/kWh
  • An internet-based reverse auction process provided flexibility and thus triggered greater competition, generating 20 bids totalling 7,500 MW. International bidders also took part, a first in state-level auctions
  • The Rewa project was the first large-scale project in India in which the renewable energy tariff of 5.5 US¢/kWh breached grid parity1. It also managed to achieve a tariff that was 24% below the lowest tariff for national entities while avoiding the need
    for subsidies

Key lessons learnt

  • Engaging the World Bank and the IFC during the planning stage provides confidence that environmental and social issues will be addressed, thereby removing roadblocks to private sector investment
  • Having a balanced risk allocation and adopting international contractual standards2 can help bring down costs more effectively than through direct subsidies
  • Online reverse auction process demonstrated the use of iterative price discovery; bidders could bid separately for each 250MW unit size, with the lowest initial tariff selected as starting price for a reverse auction process