ArcelorMittal will fund and own the project, while Greenko will be responsible for its design, construction and operation.
ArcelorMittal has agreed to invest $600m to develop the project.
Greenko managing director and CEO Anil Kumar Chalamalasetty said: “This is a pioneering partnership with the world’s leading steelmaker and we hope it will serve as a blueprint for the adoption of renewable power for large-scale steel manufacturing in India.
“These efforts will also represent a notable contribution to India’s own commitment to build 500GW of renewable energy capacity by 2030.”
The renewable power project will combine solar and wind power and be supported by Greenko’s pumped hydro storage project.
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It is expected to be commissioned by mid-2024.
Once operational, the clean energy generated by the project will be sold to ArcelorMittal Nippon Steel India (AM/NS India) under a 25-year power purchase agreement with ArcelorMittal.
AM/NS India is a joint venture company formed by ArcelorMittal and Nippon Steel.
The company will procure 250MW of clean energy from the project a year, which will be enough to meet more than 20% of the power requirements of AM/NS India’s Hazira plant.
The amount of clean energy purchased will be equivalent to reducing nearly 1.5 million tonnes of carbon emissions a year.
ArcelorMittal CEO Aditya Mittal said: “We will be partnering with a highly experienced energy transition company in a project that will enable our joint venture company, AM/NS India, to reduce both its electricity costs and carbon emissions, as well as providing consistent, guaranteed returns for ArcelorMittal.”
According to Business Standard, ArcelorMittal has set a target to offset 25% of its carbon emissions level by 2030 at an expected cost of $10bn.