NTPC announced on January 18 that it has been chosen by the Cuban government as the preferred partner for carrying out a 900MW PV project in Cuba. With the deal struck, NTPC is now searching for potential project partners. The 900MW of PV generation capacity will be distributed among 175 sites across all 15 provinces of Cuba. The request for qualification (RFQ) process will formally begin this March and end this May. NTPC is a major Indian energy conglomerate that is partially owned by the Indian government. It has the opportunity to work with Union Electrica de Cuba on this project because Cuba is a member of the International Solar Alliance (ISA) that was formed under India’s leadership in 2015. The “One Sun, One World, One Grid” initiative that aims to build a global green energy grid was proposed at the first assembly of ISA in October 2018 and launched at COP26 in November 2021. ISA currently has 121 signatory states.
The 900MW project falls under ISA Program 6. Through its utility Union Electrica de Cuba and its Ministry of Energy and Mines, the Cuban government has teamed up with NTPC to install PV generation capacity around the island. NTPC will offer assistance with respect to tendering, contract arrangement, and supervision of project implementation. Furthermore, ISA has provided a framework for selecting project developers through an “international competitive process”.
The 900MW project is part of Cuba’s plan to install at least 2.1GW of PV generation capacity. The Cuban government has recently become very proactive in the development of renewable energy projects as they can help alleviate the island’s long-running problem of electricity shortages and reduce domestic greenhouse gas emissions. For many decades, Cuba has been relying on fossil fuels from foreign sources for electricity production. This approach is increasingly untenable as these foreign fuel sources are becoming less dependable due to the dynamics of geopolitics. To encourage the adoption of renewable energy technologies, the Cuban government has loosened its regulatory regime and lowered import duties on certain types of equipment. It is also offering related incentives to small businesses and potential foreign investors.
Besides solar PV, biomass and biofuel are also regarded as renewable energy sources that Cubans can readily adopt. After all, the cultivation and processing of sugar canes is a major industry in the country.
It is worth noting that earlier in January 2020, the Export-Import Bank of India extended a line of credit of US$75 million to Banco Exterior de Cuba for the development of PV projects on the island. This news was reported by Indian newspaper Business Standard at that time.
NTPC has a portfolio that encompasses coal, natural gas, hydropower, wind power, and solar PV. It is a corporate partner with ISA. Indian newspaper the Financial Express reported on January 19 that NTPC is seeking financial institutions to help place offers for raising US$750 million. This amount will fund its capital expenditure and refinance its existing loans. It is also looking for investors that may be willing to acquire a part of its subsidiary NTPC Renewable Energy.
