• Azure Power has received a LOA from SECI to develop 2 GW solar power capacity to be commissioned in 500 MW batches annually until 2025
  • For the manufacturing component of 500 MW, it has in principle agreement with a leading local solar panel maker to acquire majority stake in the production business
  • Azure Power itself will be expected to invest only 26% of equity investment in the 500 MW manufacturing requirement
  • The company has five days to double the capacity allocated by SECI as part of the greenshoe option, if it so wishes

After having its bid rejected for India’s first manufacturing linked solar PV projects tender where Azure Power was the sole bidder, the Indian company has now won the same tender that was launched again after several changes (see India To Re-Issue 5 GW Manufacturing Linked Tender).

Azure Power has announced receiving a letter of award (LOA) from the Solar Energy Corporation of India (SECI) to develop 2 GW worth of solar PV projects along with 500 MW of manufacturing capacity. Under the terms of the contract, the company is at liberty to double the capacity allocated as part of the greenshoe option over the next five days.

The entire 2 GW capacity will be commissioned in annual phases of 500 MW each starting from 2022 achieving full commissioning by 2025.

For the 500 MW manufacturing capacity, Azure Power says it has an in principle agreement with an unidentified leading Indian solar panel manufacturer to take a majority ownership stake of the manufacturing requirement which would limit the company’s own investment to 26% of equity investment.

The final tender had three interested bidders – Adani Green Energy offered to develop 4 GW projects with 1 GW manufacturing capacity and Navyug Green Energy was bidding for 2 GW solar power and 500 MW manufacturing capacity in November 2019 (see Three Bidders For SECI’s Manufacturing Linked Tender).

Azure Power says it will supply power to SECI from the 2 GW project capacity for INR 2.92 ($0.041) per kWh for a period of 25 years. Since this capacity will be connected to the interstate transmission system (ISTS), it can be developed anywhere in India and be eligible for exemption from paying ISTS charges and losses (see India Extends ISTS Charges Waive Off Period). The power purchase agreement (PPA) with SECI also allows power generated from the project capacity to be protected from curtailment.

“This opportunity is attractive to us for many reasons. The tariff is 8% higher than the last discovered tariff for an ISTS project with SECI which is one of the best solar counterparties in India. Now with a 5 GW portfolio, our scale and predictability of our growth over the next five years should allow us to capture significant efficiencies,” said Azure Power CEO Ranjit Gupta.

Separately, the company also announced appointing Yung Oy Pin (Jane) Lun Leung as resident director on the company’s board of directors and be based out of Mauritius. Leung is a senior executive at AAA Global Services Ltd., and will replace AAA Global Services CEO Eric Ng Yim On. Azure Power said Eric Ng’s decision to resign was not the result of any disagreement with the company on any matter related to its operations, policies or practices.