Hyderabad-based Greenko has recently secured Rs 5,500 crore loan from Power Finance Corporation (PFC) to build India’s first off-river energy storage project in Andhra Pradesh.
The 20-year loan has been priced at 11% per annum interest and the power generator will have to start repaying the loan only after the project has been commissioned.
After commissioning, it will get a one-year moratorium during which it will not have to make any payment to the lender.
The storage project, fully owned by Greenko, is being built for Rs 7,600 crore, of which the debt component is being funded by PFC, a public sector undertaking.
The remaining funds for construction will be put in by Greenko as equity.
An off-river energy storage project involves the construction of two large water reservoirs at two ends of a gradient on a stretch of land.
During the day, the storage facility uses solar energy to pump the water from the bottom reservoir to the top.
At night the water is pumped down to generate hydro energy. The capacity of the storage facility is 1,200 megawatts.
Such storage facility exist at hydropower projects located along rivers but this will be the first to be constructed on a land mass.
The storage facility will cater to the spot market, state-owned power distribution companies and commercial customers. Commercial customers will account for less than 20% of the business.
Around the storage facility, multiple solar and wind energy projects are being developed. They could also buy storage capacity from the facility.
Greenko itself is developing around 900 megawatts of energy storage projects in the vicinity along with ArcelorMittal.