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We have always believed in overall portfolio returns and give due weightage to factors other than tariffs.

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In Conversation With Mr. Ravi Khanna, CEO, Aditya Birla Group

We have seen a very active Aditya Birla Renewables in the recent tender bidding rounds. What are key the factors behind your aggressive push in these recent bids?

We have always believed in overall portfolio returns and give due weightage to factors other than tariffs, our recent bids reflect that. Efficient financing, compression of value chain and sourcing of some of the high value items are other initiatives responsible for recent wins.

We have recently seen some cancellations of recent solar tenders. How do such cancellations affect the morale and plans of developers such as yourself?

It is not conducive for the sector and has put a question mark on the project allotment by the competitive bidding process as they were open tenders. It creates negative sentiments in the minds of investors. In short term It does not dampen the morale of the developers as there is enough capacity to go around. However, it disrupts the planning cycle and creates wastage of pre-work. This increases the overheads of the companies.

Has Safeguard Duty affected your plans for this year and do you find it as a hurdle for Indian Solar industry to achieve its 2020 target?

Clarity of Safeguard duty is less detrimental than uncertainty on the safeguard duty. As far as current tenders are concerned, safeguard duty is not impacting them. However, the old capacity for which PPAs have been signed without the change in law protection may be impacted in the near term.

Can you talk briefly about financing PV projects in India, and the challenges that developers face?

Financing is not a challenge so long as the basic parameters of the projects, such as DSCR, credibility of developer & off-taker and basic assumptions in the financial models are realistic

and verifiable. However we believe the enforcements of such norms will become stricter looking at the challenges faced by the banking sector.

What changes in the government policy and guidelines can be favorable for the industry?

Industry continues to be plagued by the uncertainty of GST rate for solar systems. There shall be a uniform rule across all states. Similarly, open access policies wrt to renewables varies from state to state. There shall be a uniform policy for open access across different states and rules for capacity allotment shall be well laid out. Introduction of new charges and rules mid-way shake the confidence of investors as well as developers and hence shall be thought through before invoking them.

Your company is one of the largest companies in this sector. Please share the plans of upcoming projects with our readers.

We are straddling both government PPAs and private PPAs and will continue to follow the same strategy. Our approach has been not to have a large capacity in single state. Also, the approach has been to decide on the capacity in each state basis strength and policies of distribution companies vis-à-vis support provided by the local governments to solar project developers.

Will we see more M&As in the solar sector? Is this something that is on your mind as well?

We believe that industry is on the path to consolidation and M&A activity may gain momentum, particularly of small and medium size assets in the range of 200-500 MW. Of late, we have won a sizeable capacity and to that extent appetite for inorganic growth is moderated, yet we are open to grow our portfolio inorganically if we come across a good asset class which makes financial sense.


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