Jaipur, Dec 20: Amoco-Enron Solar Development Project of US has given up its Rs 400-crore 50mw solar power project that was to come up in Jaisalmer district of Rajasthan, government sources said on Saturday.

The decision to abandon the project, which was to be based on thin-film solar technology, follows the US giant's inability to mobilise the required resources. Sources said the Indian Renewable Energy Development Agency sanctioned a loan of Rs 50 crore to Amoco-Enron Development Project at 5 per cent rate of interest for the project, but it went back on its decision for reasons not known.

One possible reason for giving up the project, sources said, may have been the US company getting a similar project in Greece. The Greece project is said to be more attractive from the angle of returns.

For the project all necessary clearances had been obtained with the power purchase agreement (PPA) having been signed with Rajasthan State Electricity Board in March, 1995. The government had issued the letter of intent to the American company in November, 1994 after its bid was considered more competitive.

Sources said that despite the commercial viability of the project, Amoco-Enron was not able to achieve the financial closure before the due date. By December 31, the US company was to generate 0.25 mw of solar power and 4.66 mw by the end of December, 1999. The entire generation of 50 mw was to have been achieved by the year 2002.

The PPA had provided for payment of Rs 2.246 per kwh to the American company for the first three years of the total generation, Rs 2.695 per kwh for the fourth year, Rs 3.818 per kwh for the fifth to the 12th year and Rs 2.46 per kwh for the 13th year to 25th year.

Over 300 bighas of land for the project in Jaisalmer district had been purchased by Amoco-Enron Solar Development Project at Rs 1,200 per bigha. The US company will have to forfeit Rs 1 crore given towards the security to RSEB.

Sources said that the US company did not turn up for a meeting with the government officials here on December 8 last.

The government's move to get the solar energy tapped in Rajasthan has certainly received a major setback as a result of the American giant withdrawing from the project. At one stage it was believed that solar projects could generate 2,400 mw of power in Rajasthan alone through the establishment of solar thermal farms in the Jaisalmer area.

Besides Amoco-Enron the other American company which had shown interest was Kenetech Solar Energy Ventures and Energen International Ltd of Sri Lanka. The government had also proposed to declare a Solar Energy Enterprise zone comprising the districts of Jaisalmer, Barmer and Jodhpur in Rajasthan which get the solar insolation of 6 kwh per sq meter per day or even more.

Sources said that the government will now invite fresh bids for the 50mw solar project offering more attractive terms to the bidders. "All the stringent conditions that formed part of the previous tender documents will now be removed," said a senior government official.

There will be risk coverage with regard to the foreign exchange fluctuations in the tender documents. Earlier, there was no such thing.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.