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Thu, Oct

IL&FS faces more embarrassments: India Ratings downgrades mutual fund schemes

Crippled IL&FS group faced Tuesday more embarrassments after India Ratings downgraded its various mutual fund schemes and placed them on a rating watch negative (RWN).

The agency downgraded three series-1, three series- 2 and two series -3 mutual fund schemes of the group, “due to the deterioration in the underlying portfolio quality of the schemes due to its exposure to IL&FS group entities. The RWN reflects absence of clarity on the resolution of the above referred assets in the portfolio due to the poor financial profile of the sponsor group, which IL&FS, it said. All IL&FS IDF schemes generally have an exposure of around 23.55 per cent in group companies –IL&FS Solar Power and IL&FS Wind Energy, whose credit profile has weakened.

IL&FS and its group companies are facing liquidity crisis and had defaulted on debt repayments. The rating agency said the ratings do not factor in the expectation of the default risk for the scheme itself, as a fund/scheme generally cannot default.

“The ratings should be interpreted as an opinion about the strength of the fund’s investment policies, the expertise and experience of the sponsors and investment managers, and the scheme’s vulnerability to severe losses,” it said. The ratings also do not address the risk of a loss due to changes in the prevailing interest rates, credit spreads and other market conditions, the agency said, adding the comments on the adequacy of market value to address the extent to which fund expenses and costs may reduce distributions to unit holders.

Read more: IL&FS faces more embarrassments: India Ratings...

Saubhagaya scheme, Power Ministry, Narendra Modi, SECI, R K Singh,  Solar Energy tender The minister informed that there are three categories of states to compete under the scheme which include special category states (northeast and other hilly states). (Reuters)

The Power Ministry Monday announced Rs 100 crore award for states that would complete the household electrification early under the Saubhagaya scheme. Apart from discoms, the employees would also collectively get Rs 50 lakh award for completing the task of electrifying household under the Rs 16,320 crore Saubhagaya scheme launched by Prime Minister Narendra Modi last year in September.

“We have decided to award states for early completion of household electrification work under Saubhagaya scheme,” Power Minister R K Singh said after a review meeting of the scheme with state representatives here. The minister informed that there are three categories of states to compete under the scheme which include special category states (northeast and other hilly states).

Besides, the states would be categorised in two other broad categories – one pool of states would have those where number of households to be electrified are less than 5 lakh. Another pool of states would cover states that have more than 5 lakh households to be electrified. Singh said that out of the Rs 50 lakh award for employees of a discom, Rs 20 lakh can be distributed among employees of its division for commendable work.

He also told that some of the states have already achieved almost 99 per cent of household electrification work and those eight states would be kept out of this Award scheme. These states are Gujarat, Punjab, Goa, Andhra Pradesh, Haryana, Kerala, Tamil Nadu and Himachal Pradesh. Singh who is also New & Renewable Energy Minister said that government is looking into the issue of allowing more time for implementing solar energy projects linked with manufacturing component.

Recently Solar Energy Corporation of India (SECI) postponed the 10 GW Solar Energy tender till November 12 for the third time. The last date for submission of bid was October 12. The minister explained that bidders are of the view that the existing timeline to implement solar capacities would force them to import equipment whereas the tender aimed to promote make in India.

Read more: States to get Rs 100 Cr award for being...

Sterlite Power expects renewable energy to boost private participation as tussle over project allocations continues

Power transmission projects for connecting upcoming renewable energy capacities would take forward public-private-partnerships in the sector, Pratik Agarwal, CEO, Sterlite Power, said on Monday. “We expect Rs 3-4 lakh crore worth of transmission projects under the tariff based competitive bidding (TBCB) category in the next five years,” Agarwal added, while announcing the commissioning of the 414 kilometres long transmission project to augment electricity supply capacities to Jammu and Kashmir.

The aggressive target of having 175 giga-watt (GW) of renewable energy capacity by FY22 warrants major ramping up of transmission capacity. Company officials pointed out the need of more transmission lines, apart from the Union government’s ongoing green energy corridor scheme, to support renewable energy integration.

Inadequate transmission infrastructure has been a longstanding impediment to wind power developers, forcing the government to reduce capacities offered in the upcoming auctions by more than 50% to 1,200 MW. A 2,000 MW wind tender announced in April had also been cancelled due to this. The parliamentary standing committee on energy had noted earlier this year that the green energy corridor scheme has been a “non-starter”.

The private sector has been vocal about the government not awarding all transmission projects through TBCB and allocating a number of works to state-owned Power Grid Corporation of India — an allegation opposed by the central transmission utility. Till date, as many as 23 TBCB transmission schemes are under implementation and 14 have been commissioned. Only five of these have been completed on time.

“Commissioning the Kashmir project two months ahead of schedule testifies that the private sector is no longer reluctant to take up transmission projects through rough terrains and this should inspire the Centre and the states to take up more PPP projects,” Agarwal said.

The cost of the project is about `3,000 crore and the company expects to earn `437 crore annually on a levelised basis over 35 years.

When asked if competitive bidding would push bidders to quote unviably aggressive tariffs, as it happened in the power generation sector, Agarwal said that the power transmission industry is insulated from such adversities as mostly serious players participate in such auctions. “There should be severe penalties for project abandonment,” Agarwal said.

Read more: Sterlite Power expects renewable energy to boost...

Tata Power aims to grow solar rooftop business four-times in four years

Tata Power Renewable Energy, the wholly-owned subsidiary of Tata Power Company, plans to grow its rooftop business four-fold to around 1,000 MW from present 250 MW in next three to four years, even as the company plans awareness campaigns in 100 cities by end of FY19.

Ashish Khanna, President — Renewables, Tata Power Group, and Managing director & CEO of Tata Power Solar Systems, told Financial Express, that the company is working with financial companies and at advocacy level to provide a holistic solution to the residentials and commercial & industrials as the segment failed to grow to the level it should have due to inverted tariff structure.

He feels the trust factor for quality of products for 25 years was also missing.

“Even the financial offerings were not there as public sector banks considered them under house loans. We have come out with a scheme with Tata Cleantech Capital to offer the products under a bouquet of offerings to the residential sector. We have started this scheme in Mumbai last month and plan to take this to 100 cities in FY19,” Khanna said.

“We have around 250 MW capacity in rooftop solar and around 10,000 customers as of now,” Khanna added.

The current initiative is to make the residential sector aware of the savings benefits that are available from the project. “Our main intention is to create awareness about the benefits of net metering and savings on electricity. We have been working with the state government to see there is a win-win situation for all.

“We are taking the cream of consumers, who are also selling the power back to the grid. They will also become service providers to the discoms,” he said.

In 2015, the ministry of new and renewable energy announced 40,000 MW target for rooftop installations by 2022 which was backed by a 30% subsidy for residential buildings.

Besides, the government also urged the state governments to announce policies to enable net-metering, a billing mechanism that enables power consumers to be paid for injecting renewable power into the grid.

“However, this failed to enthuse home owners, the majority of whom pay small electricity bills and find the cost of solar equipment prohibitive in comparison.

Commercial and industrial building owners have shown more enthusiasm as their large power bills justify the expense of solar power systems, even though they get no subsidy.

But here, policy and regulation are blocking the way, say a range of industry participants, including installation businesses, consultants and power distribution companies (discoms).

As of March 31, 2018, India installed 2,538 MW of rooftop capacity, according to the consultancy Bridge to India. This gives rooftop solar a 10% share in India’s overall solar capacity installation with large-scale and off-grid solar installations cumulatively nearing 22,000 MW during the same period.

Tata Power Renewables Energy (TPREL) posted a net profit of Rs 71 crore in Q1FY19 as against `56 crore in Q1FY18, while the Walwhan Renwable Energy, the business bought from Welspun Renewable Energy, recorded a profit of `101 crore in Q1FY19 against a profit of Rs 60 crore a year ago.

Read more: Tapping sunshine: Tata Power aims to grow solar...

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