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Azure Power

India-based Solar IPP Azure Power Raises $500 Million Through Bond Sales

written by saurabh

One of India’s leading solar power project developers – Azure Power – managed to raise $500 million through bond sale to overseas investors.

The proceeds from the bond sale will be used to purchase rupee-denominated debentures and loans of subsidiaries that directly own several solar power projects across India. The company has more than 1,100 megawatts of solar power capacity under construction.

The bond issue received tremendous response as investors offered to put in around $1 billion against the bond size of $500 million.

Azure Power will offer a yield of just over 5.5%. This is a pretty attractive rate for international investors but for Azure Power this is a much better deal. The yield it will pay is less than even the primary lending rate of the Reserve Bank of India. If Azure had raised these funds from Indian banks it may have had to pay as much as twice as much.

This is perhaps one of the most critical reason for Indian private sector renewable energy developers to raise funds from international markets through bonds. Indian banks are currently overexposed to the power sector and several thermal power plants have become non-performing assets due to several reasons including, over-supplied market, increased coal costs and competition from renewable energy.

As a result, renewable energy sector finds it difficult to raise debt from Indian banks even if the latter are willing to provide funding. Solar power developers are facing sector-specific issues as well. We reported in May this year that solar power tariff bids in India have collapsed 26% in just 3 months. This sharp correction and aggressive bidding by developers may be making Indian lenders nervous as they could be apprehensive of financial sustainability of the projects.

Recently, another India-based renewable energy developer Greenko Energy Holdings also raised $1 billion in the largest green bond in Asia. The company had acquired assets from SunEdison India following bankruptcy of latter’s American parent.

Funds raised from the issue will serve multiple purposes for Greenko. About half of funds will be used to refinance a $500 million dollar bond issue floated by the company in 2014. Proceeds from the issue will also be used to retire debt it inherited along with the acquisition of SunEdison India’s assets.

July 31, 2017 0 comment

450 Megawatt Capacity Commissioned At 1 Gigawatt Kurnool Solar Park In India

written by saurabh

A large-scale solar power park in southern India is slowly reaching its planned capacity of 1 gigawatts as more and more developers commission their projects.

The Kurnool solar power park owned by NTPC Limited, India’s largest power generating company, has reached an installed capacity of 450 megawatts following operationalisation of two projects. Two more projects and the solar park will reach the milestone of 1 gigawatts to become one of, if not the largest, solar power park in the world.

SB Energy, a joint venture company of Softbank, Foxconn Technology and Bharti Enterprises, had commissioned a 350 megawatt (AC) project in late March 2017 while Azure Power recently commissioned 100 megawatt (AC) project in early June 2017. All projects commissioned at the solar power park will supply electricity to state-owned utilities of Andhra Pradesh where the park is located.

Both, Azure Power and SB Energy secured rights to develop their projects under the ‘open’ category which means that they were free to use Indian or imported solar panels. While the origin of panels used by Azure Power is unknown, SB Energy used more than 700,000 panels manufactured by China-based Trina Solar.

The other two developers – Greenko Energy and Adani Green Energy – won their projects under the Domestic Content Requirement (DCR) category and are obligated to use Indian-made panels. Greenko is developing a 500 megawatts (AC) project at the park which, once commissioned, will likely become the second largest solar power project developed by a single developer at a single site in India.

Adani Green Energy, which currently operates the largest solar power project in India, will commissioned 50 megawatts (AC) project at the Kurnool solar power park.

June 18, 2017 0 comment

Hareon Solar To Co-develop 118 Megawatt Solar Project In India

written by saurabh

Chinese solar modules manufacturer Hareon Solar is looking to expand its footprint in one of the fastest growing solar power markets in the world.

Hareon Solar has entered yet another investment deal with one of the largest independent power producers in the solar power sector in India. The Singapore-based investment unit of Hareon Solar has signed an agreement with Azure Power to develop 118 megawatt solar power project in the state of Telangana.

Hareon Solar will also supply solar panels for the project in another deal worth no more than $40 million. The investment arm of the modules manufacturer will pick up 45% stake in the project at $11.1 million.

The investment by Hareon Solar seems sound as the project was secured by Azure Power through a competitive auction organised by India’s largest power producer NTPC Limited. Power generated from the project will be sold to NTPC through a 25-year power purchase agreement, thus securing long-term revenue stream.

Last year, Hareon Solar and ReNew Power Ventures commissioned a 72 megawatt solar power project in Andhra Pradesh. ReNew Power Ventures had secured the project in auction at a tariff of ₹5.98/kWh (9.0¢/kWh). Hareon Solar had supplied solar panels and also acquired equity stake in the project.

April 30, 2017 0 comment

India’s Azure Power Commissions 130 Megawatts Solar Capacity

written by saurabh

One of India’s major solar power developers Azure Power announced operationalisation of three utility-scale projects just ahead of the start of the new financial year.

Azure Power announced that it commissioned three solar power projects of combined capacity 130 megawatts in the southern state of Karnataka. These projects include one of 50 megawatts capacity and two of 40 megawatts capacity each.

All three projects are tied up in long-term power purchase agreements spanning 25 years with power utilities owned by the state government. Electricity generated from the projects will be sold at Rs 6.51/kWh (0.10¢/kWh).

Azure Power is also working in partnership with Hanwha Q Cells in the neighbouring state of Andhra Pradesh towards the development of a 50 megawatt project.

Azure Power now claims to have the largest operational solar power capacity in Karnataka, a record that is not expected to last for too long as several developers are either developing or vying for large-scale projects within even larger solar power parks.

The company has been an active participant in various competitive auctions held under India’s National Solar Mission and was among the first companies to set up projects under this ambitious program. Azure Power is also listed at the New York Stock Exchange. The company has pledged to install 11 gigawatts of solar power capacity in India over the next few years.

April 1, 2017 0 comment

SoftBank, SkyPower Global Eye Share In 1 GW Solar Power Park In India

written by saurabh

A number of Indian and foreign project developers are looking to set up projects under the planned 1 GW solar power park in the Indian state of Odisha.

According to media reports, interested developers include SoftBank-led SB Energy and Canada-based SkyPower Global. Among the Indian developers looking to set up projects are Azure Power, Panchvaktra Holdings, Orange Renewable and Shapoorji Pallonji.

Last year, the government of Odisha has announced plans to set up 1 GW solar power park spread over 5,000 acres of land. The state would acquire 20% of the electricity generated while the developers shall be free to sell the balance in open market, perhaps one of the reasons for such great interest shown by these companies.

Under the public partnership model, Green Energy Development Corporation of Odisha Ltd (GEDCOL), a 100 per cent subsidiary of Odisha Hydro Power Corporation would be the nodal agency for implementation of the solar park. GEDCOL would partner with Solar Energy Corporation of India (SECI) for development of this park.

Auction of projects that will form part of the solar power park will likely by conducted by the Solar Energy Corporation of India (SECI) which also recently auctioned 270 MW solar power capacity in the state.

September 24, 2016 0 comment

Fotowatio Renewable Wins First Solar Power Project In India

written by saurabh

The Indian solar power market continues to attracts new foreign developers despite the recent concerns over the fate of solar power project pipeline of SunEdison.

Fotowatio Renewable Ventures has secured its first win in India. The company secured rights to develop 100 MW solar power project in Andhra Pradesh. The project shall be part of a larger solar power park in the state.

The project was allocated through a competitive auction where the tariff was fixed but bidders had to indicate the lowest capital cost support they would need from the government.

Fotowatio will set up the 100 MW with a capital support of Rs 44.5 lakhs (US$67,000) per MW at a fixed tariff of Rs 4.43/kWh. The capital cost support desired by the company is less than 9% of the total capital cost determined by the Indian regulatory body for solar PV projects for the current financial year.

Other major winners of the tender were Acme Solar (150 MW), Tata Power Renewable Energy (100 MW) and Azure Power (50 MW). These developers will receive capital cost support of between Rs 55 lakhs (US$82,800) to Rs 74.5 lakhs (US$112,200) per MW against the estimated capital cost of around US$790,000 per MW.

Fotowatio Renewable Ventures was in the news recently for being part of a consortium that place the world’s lowest-ever solar power bid. The consortium had placed bid of US2.99/kWh for the third phase 800 MW capacity of the Dubai solar power park. This tariff is less than half the tariff Fotowatio will receive in the Andhra Pradesh project.

Fotowatio was acquired by Saudi Arabia-based Abdul Latif Jameel Group in April 2015.

May 7, 2016 0 comment

Indian Solar Power Bids Stabilise At US$7/kWh In Absence Of Foreign Competition

written by saurabh

In the absence of international project developers who had driven solar power bids to historic lows in India, fresh bids seem to have stabilised at around US$7/MWh.

In one of the recent solar power auctions in India the competition among bidders remained very high but the lowest tariff was in-line with those seen in other auctions where foreign developers had failed to make the cut.

A total of 350 MW solar power capacity was auctioned in the southern Indian state of Telangana. The winning bids were Rs 4.66/kWh and Rs 4.67/ kWh (US¢7.00/kWh). Five developers managed to secure 350 MW capacity within this tight bidding range.

ReNew Power Ventures and Azure Power won 100 MW capacity each while Karvy Consultants Adani Enterprises and ACME Solar won 50 MW capacity each. All these developers, except Karvy Consultants, are some of the most active project developers in the Indian solar power market. Karvy Consultants is one of the India’s largest integrated financial services provider.

Again, no foreign developers could secure any project. It was not immediately clear which foreign developers participated. Last year, the likes of SunEdison, SkyPower Global, SBG Cleantech and Fortum Group had driven the solar power tariffs to record-low levels of Rs 4.34/kWh (US¢6.5/kWh).

Following the bankruptcy protection filing by SunEdison the participation by foreign project developers has gone down sharply. And in their absence Indian developers have managed to win many projects at comparatively higher tariffs.

While the recent bids of around Rs 4.70/kWh (US¢7.1/kWh) are at a premium of around 8% to the lowest bid ever in India they are at a discount of 19% to the benchmark tariff set by the Indian regulatory body for the current financial year.

May 7, 2016 1 comment