Andhra Pradesh cabinet on Wednesday approved a government plan to develop 10,000 mw of solar power capacity for meeting the state's energy needs. The project will require a massive investment of Rs 35,000 crore-Rs 45,000 crore, according to the state information and public relations minister Perni Venkataramaiah (Nani).

A new company called AP Green Energy Corporation will be incorporated as a wholly owned subsidiary of the state-owned power utility AP Genco for the purpose of developing the 10,000 mw solar power project. The project will be funded 100 percent by the state nodal agencies, the minister said without elaborating on how they seek to mobilise these funds or the exact timeline.

The state government will tap the subsidy grant provided by the Centre at the rate of Rs 20 lakh per megawatt for the project. This massive solar project is expected to be set up at Donakonda in Prakasham district, where a huge chunk of government land is available.

Once the project is commissioned, the Green Energy Corporation will sell power to the state power utilities at the rate of Rs 3 per unit for supply to the grid, according to the minister.

AP has around 7,200 mw of installed capacity, mostly in thermal and hydel power under the state sector, around 9,700 mw of installed capacity under gas, wind and solar power run by private sector and another 3,500 mw of capacity in the Central sector totalling around 20,000 mw of installed capacity. The new project would add 50 percent to this entire installed capacity in the state.

The minister said proposed solar power project is intended to meet the requirements of agriculture sector for which the government has promised to provide 9 hours of free power per day entirely during day time.