It’s the next level game for the 500 MW power project in Andhra Pradesh. SunEdison, world’s biggest renewable energy player that had bagged the project to open the power plant in the state has now decided to take the equity route.
The company now plans to offload equity and has approached the prospective buyers to sell stakes. To this effect, SunEdison had already consulted investment bankers to value the project. The company won the project November last year with a bid of Rs 4.63 per unit in an auction that was conducted by NTPC for solar plants in the state under the Jawaharlal Nehru National Solar Mission.
Now, SunEdison can sell up to 49% stake in the initial phase, with an option to exit only one year after being commissioned.
President, Asia Pacific, at SunEdison, Mr Pashupathy Gopalan explained the possibilities. “We are always looking for equity investors as a business model in addition to selling our assets to our YieldCo” he said. “The power purchase agreement (PPA) we’re about to sign for the Andhra project allows us to sell up to 49% stake after signing the PPA” He stressed on the fact that SunEdison was extremely serious about executing the project.
“We have made an equity infusion of Rs 120 crore into the company and have submitted performance bank guarantees of Rs 150 crore to NTPC. We have done all the paperwork and are waiting for NTPC’s response before signing the PPA,” he added. In our business model, we will continue to explore three strategies on an ongoing basis – holding assets in our balance sheet, selling assets to our YieldCo and partnering with third party investors” he said.
The project was won by the company at a very nominal price, that has set off the panic bells in the industry. The competition was skeptic about the viability of the tariff.
Image Source – SunEdison