India: Maharashtra Climate Resilient Distributed Renewable Energy Access Program

proposed

Maharashtra, a major agricultural state in India, relies heavily on subsidized or free electricity to farmers for groundwater irrigation. Grid-connected electricity is supplied for agricultural users on a rotational basis at off-peak times. Farmers must wait for unreliable nighttime power, as daytime electricity is prioritized for higher-paying commercial and industrial users. The inability to recover costs from agricultural consumers leads to significant financial losses for Maharashtra State Electricity Distribution Company Limited (MSEDCL), limiting its ability to maintain and upgrade the electricity grid for all users. To address these issues, the state plans to promote the adoption of off-grid solar-powered water pumps among farmers and shift the supply of grid connected pumps to solar power. This initiative aims to alleviate financial pressure on MSEDCL and reduce cross-subsidy burdens on commercial users. It will also support broader objectives of clean energy usage. The program will contribute to a more sustainable and environmentally friendly energy sector in Maharashtra by advancing solar energy adoption. The proposed result-based program (RBP) is designed to address these financial challenges and boost solar energy integration into the grid. It consists of three key components: (i) financing 500,000 off-grid solar pumps over the next five years; (ii) strengthening the distribution system by upgrading equipment such as transformers, breakers, and feeders to optimize power distribution and accommodate the increasing influx of solar energy; and (iii) providing technical assistance and capacity building to enhance the capacity of the implementing agency and beneficiaries to deliver consistent benefits.