India and China on Monday signed an agreement for the construction of the world’s largest photovoltaic (PV) solar plant, a development that is expected to boost the country’s energy exports and provide a boost to the struggling coal industry.
India is the world leader in the production of electricity from photovolts, with 1,000 megawatts of solar panels on offer, but has been unable to generate enough of the raw material for its needs in the wake of the 2008 global financial crisis.
India has also struggled to diversify its economy, with its coal-dependent economy struggling to compete with cheaper imports from China.
The deal between the two countries will see India’s solar power capacity expand by nearly 1,400 megawatts over the next five years, which could increase India’s output of electricity by more than 10%.
The deal also provides for the purchase of a 3,000 MW solar park in the state of Gujarat.
India’s coal-heavy economy has been hit by rising global demand, and coal exports have declined as the country has been able to diversiate its economy through its domestic coal sector.
The government of Narendra Modi has vowed to bring down India’s carbon emissions by at least 60 per cent by 2022.
India will also receive a $1 billion loan from China for solar power projects, according to the Indian embassy in Beijing.