The Asian Development Bank (ADB) and SAEL Industries Limited have signed an agreement to promote the generation of biomass energy in India.
The agreement is worth up to INR 754 Crores (around $91.14 million) and aims to help diversify India’s energy mix and reduce carbon intensity by converting crop residues into energy.
Farmers in Northern India burn crop stubble each year to remove paddy residue, resulting in severe air pollution with devastating health effects in the region.
Under the agreement, ADB will fund the construction of five biomass power plants in the state of Rajasthan. The power plants will convert about 650,000 tons of agricultural residues into electricity and are expected to generate 544 gigawatt-hours of energy per annum, helping avoid up to 487,200 tons of carbon dioxide annually.
SAEL Industries’ business model uses crop residues as fuel in waste-to-energy projects, and the company aims to grow its portfolio to 3.5 GW over the next four years by adding 100MW of new biomass and 600MW of new solar capacity annually.
In addition to reducing air pollution and climate emissions, the initiative will provide income to farmers through the sale of agricultural residue.
ADB Vice-President for Private Sector Operations and Public–Private Partnerships, Ashok Lavasa, said that establishing biomass power plants that can repurpose agricultural residue will help protect the environment while contributing to the government’s goal of expanding renewable energy sources and reducing carbon dioxide emissions.
The ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty.
The SAEL Industries Limited has previously received an equity investment from Norwegian fund Norfund