GANDHINAGAR, India (Reuters) - Solar power firm SunEdison (N:SUNE) and Indian conglomerate Adani Enterprises plan to invest up to $4 billion in what would be one of India's largest solar panel makers, a boost for Prime Minister Narendra Modi as he hosts an investment summit.
On the sidelines of Modi's Vibrant Gujarat gathering of statesmen and business leaders, the two firms said on Sunday that the new joint venture project would manufacture low-cost photovoltaic solar panels, helping turn sunlight directly into electricity at cheaper rates.
Solar energy in India costs up to 50 percent more than power from sources like coal.
"This facility will create ultra-low cost solar panels that will enable us to produce electricity so cost effectively it can compete head to head, unsubsidized and without incentives, with fossil fuels," said Ahmad Chatila, President and Chief Executive Officer of U.S.-based SunEdison, already a significant player in India.
The deal -- though still subject to further analysis over the coming months -- is a boon for Modi, who has sought to encourage both alternative energy and manufacturing through his "Make in India" campaign.
India gets twice as much sunshine as many European countries that use solar power. But the clean energy source contributes less than 1 percent to India's energy mix, while its dependence on erratic coal supplies causes chronic power cuts.
Modi wants companies from China, Japan, Germany and the United States to lead investments of $100 billion over seven years to boost India's solar energy capacity by 33 times to 100,000 megawatts (MW).
This plant, which is expected to take three years to build, would add up to 20,000 jobs to the local economy, giving Modi's government a chance to assert that India's economic recovery can also create the jobs it needs to satisfy a booming workforce.
In a separate announcement on Sunday, Adani (NS:ADEL), one of India's largest conglomerates, said it had signed a memorandum of understanding with Australia's Woodside Petroleum (AX:WPL) to explore sourcing and marketing of liquefied natural gas.