Congratulations on creating a new benchmark in the Indian solar industry. How was behind-the-scenes action at Solarpack while bidding for this tender?
We sincerely thank you very much for appreciating our participation in the prestigious auctions program of 2GW, we believe this is the most viable tariff for such large capacity project having highest rating off-taker as Solar Energy Corporation of India “SECI” with its impeccable track record, SECI has been instrumental in building confidence for international investors to invest in Indian Renewable Energy Sector supported by ISTS connectivity benefits to achieve much better uptime of the plant. We also believe that buying utility and consumers shall benefit with this competitive tariff and make good case as preferred source of electricity affordable to masses.
Solarpack works as a coherent team between India and Spain, it has been exciting to work on such large project together, also we are glad to have secured the win among very credible competitors as other participants in this bid.
How is this project strategically important to SolarPack?
We are a multinational specialized in the development, financing, construction, operation and management of utility scale solar photovoltaic power plants with presence in fast-growing markets in Europe, North America, Latin America, Asia and Africa. It is a very important milestone for our company, not only because we have managed to put together the most competitive offer thus far in India but also because the project represents a sizeable order entry to our backlog or contracted project portfolio, that beats our own yearly targets to the market of between 150-300 MW order entry per year on average. Also by winning this project our overall portfolio reached beyond GW mark globally.
As the company mentioned that the solar park in Rajasthan would require an investment of around EUR 129 million. Going ahead, what would be your company’s investment plans in this regard?
We believe in geographical diversification and we have very strict metrics for deciding which projects are suitable for our power generation business. Since we like to have a right balance of geographical global footprint for our generation fleet, the size and the pace of future additions in each of the market, where we are present to our power generation business will be driven by keeping a well-diversified asset base. We would be keen to develop more such projects in India, since Indian Solar market provides the scale and multiple opportunities to choose between Central, State and Open Access programs.
What kind of returns are you expecting for this project?
Our power generation business unit targets 12-15% equity levered IRRs for this type of assets.
Tell us more about the factors that made such a low tariff of INR 2.36/unit feasible.
We think there are significant improvements on the technology side in Solar Module & Inverters in terms of efficiency and increased equipment capacity that helps in conceptualizing such a large project delivering higher PR at lower BoS cost. Further recent tax benefits under new manufacturing scheme including power generation and Dividends Distribution Tax changes are initiatives Govt. of India has announced to invite domestic & oversees investment are definitely the key driving factors, more over the PV price are declining at a steady pace making Solar Energy as the most viable source of energy in near future.
Solarpack is a highly specialized integrated solar PV platform that covers the full value chain of utility scale solar PV project integration. We do everything from greenfield development to financing, construction and O&M. Being present in the entire value chain since 2005 allows us to have an evolving, in-depth knowledge in all the key elements that make a project competitive: the right project location, competitive capex, continuous improved engineering designs, long-standing relationships with Tier 1 suppliers and subcontractors and experienced construction managers, optimal financial structure and competitive O&M provided by our own teams.
What are your plans for the upcoming tender bids in India? Will we see this continued aggression by SolarPack?
India is an important market for Solarpack and in that regard, we will continue to pursue profitable growth in this market by developing and building new projects in the future. Of course, the pace at which we will grow will be determined by our ability to do it in a profitable way and the right balance with other important markets in which we are present.