Saturday, May 28, 2011

Azure Power to invest Rs 1,500 crore in solar projects

Azure Power to invest Rs 1,500 crore in solar projects

A grid-connected solar power generator, Azure Power aims to build 100 Mw solar-based power plants in the next three years, with a total capex of  Rs 1,500 crore.

The New-Delhi-based firm is expected to float an IPO, said Inderpreet Wadhwa, chief executive officer, but did not set any timeline. Azure Power, part-funded by venture capitalists Helion Venture Partners and Foundation Capital, may opt for further fund raising in the medium term, he said. “I think we are very well capitalised at this point, but I can certainly expect another round in may be 18-20 months.”

The firm has a running grid connected 1 Mw solar photovoltaic plant in Punjab and is expanding it by another megawatt. It is also in the process of setting up a 15 Mw plant in Gujarat by November 2011.

Country’s grid-connected solar power capacitycurrently is close to 3 Mw, recently launched its solar policy framework, National Solar Mission, that aims to increase it to 1,000 Mw by 2013 and  to 4,000 Mw by 2017.  European countries like Italy have added 800 Mw solar power projects in just 12 months, while Germany has added 3,000 Mw in a short period, and India can also achieve a similar feat, provided policies are supported by vigorous efforts, he added.

The main challenge of higher capex for solar technology is not preventing companies like Azure Power from going ahead as costs are falling slowly and also India has set up a differential tariff regime for solar power to make it more attractive.

“The first project we actually did was about Rs 19 crore per Mw, the second project we are doing is about Rs 17 crore per Mw, and we expect that prices would continue to decline, to about Rs 15 crore per Mw over couple of years,” he said.

The firm is selling the entire power it produces at its Punjab plant to the state-run utility under a 30-year agreement, which will yield Rs 15 per unit for the first 10 years to the firm and Rs 8.93 per unit for next 20 years, he said.

The 15 Mw Gujarat project, in partnership with US-based SunEdison, has a 25-year contract with Gujarat state-run utility to offload its power at Rs 15 per unit for 12 years and Rs 5 per unit for the remaining period, he added.    

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