San Giorgio Group Case Study: The Role of Public Finance in CSP India Rajasthan Sun Technique

This case study analyzes the 100 MW Rajasthan Sun Technique concentrated solar power (CSP) plant in India, examining how a combination of national policy, foreign public debt, and private risk management enabled the project despite broader failures in India's National Solar Mission (NSM) phase one. While the project demonstrates the viability of linear Fresnel technology and the importance of long-term public financing, it also highlights the 'winner's curse' associated with reverse auctioning schemes that led to underestimated costs and project delays across the sector.

• The Rajasthan Sun Technique CSP plant is the world's largest facility utilizing linear Fresnel technology and is among the first completed under India's National Solar Mission (NSM), although its construction faced delays.
• The project's financial viability was secured through a Government of India subsidized power purchase agreement (PPA) awarded via reverse auction, supported by public ownership of the off-taker and a payment security scheme to protect developers from sub-national distribution company defaults.
• Foreign public debt provided by the Asian Development Bank, FMO, and the US Export-Import Bank totaled USD 280 million with maturities up to 18 years. This significantly exceeded the 7-10 year maturities of local debt and increased the internal rate of return of project equity by approximately 250 basis points (2.5%).
• Private sector stakeholders assumed higher-than-standard risks to enter the Indian market: Reliance Power managed development and non-hedgeable foreign exchange risks, while Areva Solar provided the technology and comprehensive warranties.
• India's reverse auctioning system achieved low costs—with average tariffs 25% lower than the NSM phase one reference tariff and lower than tariffs in Spain and South Africa—but failed to meet deployment goals. Only three of seven projects (Godawari, Megha, and Rajasthan Sun Technique) are nearly complete, as most winners suffered from the 'winner's curse' due to poor solar resource data and underestimated costs.
• The Rajasthan Sun Technique project achieved a local investment value of 61-71%, contributing to the establishment of a local supply chain and water and electricity infrastructure, which created hundreds of high-paying local jobs.
• India's CSP deployment fell significantly short of targets; the original goal of 500 MW by mid-2 same-year 2013 was reduced to a same-year 150-200 MW projected for completion by mid-2014.

APA

Climate Policy Initiative (2014). San Giorgio Group Case Study: The Role of Public Finance in CSP India Rajasthan Sun Technique. https://www.climatepolicyinitiative.org/publication/san-giorgio-group-case-study-the-role-of-public-finance-in-csp-india-rajasthan-sun-technique/

Chicago

Climate Policy Initiative. San Giorgio Group Case Study: The Role of Public Finance in CSP India Rajasthan Sun Technique. 2014. https://www.climatepolicyinitiative.org/publication/san-giorgio-group-case-study-the-role-of-public-finance-in-csp-india-rajasthan-sun-technique/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=San Giorgio Group Case Study: The Role of Public Finance in CSP India Rajasthan Sun Technique |date=9 March 2014 |url=https://www.climatepolicyinitiative.org/publication/san-giorgio-group-case-study-the-role-of-public-finance-in-csp-india-rajasthan-sun-technique/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2014san, author = {{Climate Policy Initiative}}, title = {{San Giorgio Group Case Study: The Role of Public Finance in CSP India Rajasthan Sun Technique}}, institution = {Climate Policy Initiative}, year = {2014}, month = mar, url = {https://www.climatepolicyinitiative.org/publication/san-giorgio-group-case-study-the-role-of-public-finance-in-csp-india-rajasthan-sun-technique/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }