The Asian Development Bank (ADB) and French utility company Engie Group have signed a long-term loan agreement to build and operate a 400MW solar photovoltaic (PV) power plant in the Indian state of Gujarat.

ADB acted as the mandated lead arranger for the entire loan, amounting to INR14.6bn ($176m). Both ADB and the Asian Infrastructure Investment Bank provided INR7.3bn ($87m) each.

The proposed solar PV project aligns with the Indian government’s goal of achieving a minimum of 500GW of non-fossil fuel energy capacity by the end of this decade.

ADB private sector operations director general Suzanne Gaboury said: “The private sector’s engagement in the fight against climate change is pivotal for achieving a clean energy transition in Asia and the Pacific.

“This project exemplifies how ADB, as the region’s climate bank, supports the private sector in developing renewable energy projects through long-term local currency financing typically unavailable in local capital markets.”

To be located in Surendranagar District, the solar PV power plant is expected to generate an average of 805 gigawatt-hours per annum over the next 25 years.

It will also eliminate approximately 662,441 tonnes of carbon dioxide emissions per year.

Enren Energy, a special-purpose vehicle owned by Engie Group, will execute the Indian solar PV project. The state-owned electricity distribution company Gujarat Urja Vikas Nigam will be the sole off-taker of the project.

The solar panels for the proposed power plant will be built using locally produced bifacial PV power modules. This will result in the diversification of the solar module supply chain as well as support India-based manufacturers, said the parties.

Engie India CEO and country manager Amit Jain said: “In collaboration with ADB, we’re bringing a landmark 400MW solar project to Surendranagar, Gujarat, marking a significant stride in India’s clean energy journey.

“This venture not only aligns with our green power goals but also catalyses local job creation, reinforcing our pledge to India’s nonfossil fuel future, firming our commitment to India’s energy transition.”