Winners Speak: REWA Tender

Perspectives
Typography

“ACME is really proud to participate in Indian government’s continued effort to make renewable energy more bankable and attractive for both financial investors and Indian utilities.

 Mr. Manoj Kumar Upadhyay, Founder & Chairman, ACME Group

REWA project is an excellent example of a win-win which can be achieved by pro-active measures from government and awareness of requirement of investors and lenders. Excellent work was done by project advisors and government in devising notable features like sovereign guarantee, running a very structured process, top rated off taker take or pay and state of readiness of solar park. That coupled with our great experience with MP government and utility because of our existing plant in state (25 MW for last three years) gives us tremendous confidence to expand our 1.5 GW portfolio with this asset win. We are sure this would be a great addition to our portfolio and we look forward to execute the same. Quality of bid winners in this bid really proves that it was won on execution experience and thorough financial analysis. Both ACME( all in-house) and Mahindra are top two EPC developers in country having executed large solar plants and Actis the third winner has deep financial experience in emerging markets to value protection PPA offers. On module prices let's move wordings to projected to fall rather than have fallen to help us in our ongoing projects.   SBG and ENEL were there at 2.98 that shows how close the bidders were on converging on tariff and quality of bidders. There is already an interest in lender community to participate in this project given the strong framework and ready infrastructure for project thus eliminating construction risk and counterparty risk for lenders.”

 Mr. Basant Jain, CEO, Mahindra Susten

“Being an integrated IPP, we bring in a unique proposition which reduces the variance on account of technology providing an edge to us. Our parent, Mahindra Susten has been offering Solar EPC cum O&M solutions for over 5 years which reduces the factor of uncertainty for us in terms of performance or quality of construction. The projects set up by Susten have been consistently over performing the market, are built within timelines and with minimal cost escalations. Therefore, it provides us headroom in estimating the right performance for the plant and the most optimized design of the plant. Moreover, it also allows us to reduce the variability in execution timelines and cost escalations, which becomes an integral part of any other foreign developer’s calculation if they are to bring on board an EPC partner after the bid outcome. Similarly, for a prudent player which believes in not keeping the exchange rate risk open, the cost of capital also mostly gets out of equation.“

“The project is unique in the way it is structured, it is a testimony of the true Public Private Partnership model. We believe the RUMS team and IFC has done a smart job to draft the project documents in a manner which identifies and sort out factors which would pose a risk for developers and the developers would have to in turn beef up some buffer to account for these risks. The structuring of this tender reduces the risk for the developers and that    is the reason that even after the marathon reverse auction there were many players willing go down below Rs 3 per kWh for this tender. All credit goes to the RUMS management, State Government and their advisory teams including IFC, PWC, Trilegal, Sgurr etc. in correctly identifying the risks which would be best taken by the State and allow the enterprising abilities of the developers to flourish. In addition, the extended commissioning timelines of 18 months and the comfort that he timelines for developers start only when 90% land is handed over, provided additional comfort.”