NTPC seeks to buy 1000 MW solar projects
2 min read . Updated: 24 Jul 2020, 01:03 PM IST- NTPC seeks to buy such projects from promoters, lenders or merchant bankers as part of its strategy to have a 32 gigawatt clean energy portfolio by 2032
New Delhi: State-run NTPC Ltd plans to acquire at least 1000 mega watt (MW) of operational solar power projects and has invited request for proposal (RFP) for the same.
According to the RFP reviewed by Mint, India’s largest power generation utility seeks to buy such projects from promoters, lenders or merchant bankers as part of its strategy to have a 32 gigawatt (GW) clean energy portfolio by 2032. It currently has a 2298 MW renewable energy projects under construction.
The other criteria mentioned by the RFP include, a tariff of less than or equal to ₹5 per unit approved by the respective state or Central Regulatory Commission and an operational installed capacity of at least 50 MW at a single location.
This comes at a time when India’ solar power tariffs have touched a record low of ₹2.36 per unit at an auction conducted by state-run Solar Energy Corporation of India Ltd.
“The company is also contemplating to increase its renewable generation capacity through acquisition of Operation Solar based Power Assets located in India for a minimum capacity of 1000 MW," the RFP said.
With an installed capacity of 62.91 GW, NTPC seeks a two-stage proposal comprising techno-commercial and price bids. The techno-commercial bids are to be submitted by 22 September.
“The offered Asset(s) can be either an Special Purpose Vehicle (SPV) wherein the applicant intends to offer their 100% equity for sale to NTPC or it can be a standalone Asset(s) which the applicant intends to offer for possible acquisition by NTPC," the RFP said.
There is growing consolidation in India’s clean energy space. Some of the deals in the works reported by Mint include, a proposed 51% stake sale in Tata Power’ renewable energy InvIT, a majority stake sale in Finland’s state-controlled power utility Fortum Oyj’s 500 MW Indian solar projects and Rahul Munjal-led Hero Future Energies Pvt. Ltd looking at selling part of its stake in its clean energy business.
While India's clean energy space is seeing capacity addition, there are concerns of dwindling debt financing with large Indian banks reluctant to fund projects that have committed to sell power at less than ₹3 per unit. The banks are wary of the viability of projects that have agreed to sell power at rock-bottom tariffs.
Concerns have also emerged, with some state governments including that of Andhra Pradesh wanting to renegotiate clean energy contracts. The latest case in point being Punjab which has sought a discount from solar power developers because of low interest rates and a financial crunch exacerbated by the pandemic.
Green energy projects now account for more than a fifth of India’s installed power generation capacity of 370 GW. India has 34.6 GW of solar power and with an ambitious capacity expansion plan to achieve 100 GW solar capacity by 2022.
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