Azure Rooftop Solar Project_2.5MW

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In April 2012, Gujarat Government's Department of Energy and Petrochemicals signed a 25-year concession agreement (from the scheduled commercial operation date) with Azure Sun Energy Private Limited (“Azure Sun”), a 100% subsidiary of Azure Power India Private Limited, to construct and operate a 2.5 MW rooftop solar power (“Project”) in Gandhinagar.The Gujarat Government shall provide Azure Sun access to around 25 state government owned building rooftops which should be sufficient to generate about 2 MW, while the balance 0.5 MW would be generated by installing rooftop systems on around 250 households. As per agovernment notification the city residents shall be encouraged to come forward to participate and shall be offered “green incentive” – which is set as INR 3/ kWh of electricity generated by the SPV system installed on their property. Azure Sun will then connect power generated by the panels to the city grid While about 40 companies had expressed interest in the project, finally only four companies submitted their bids. This included Lanco Infratech, SunEdison, Azure Power and Mahindra Solar. The winning bidders were those quoting the lowest tariff. Out of these SunEdison and Azure Power were selected and have been awarded for individual phases of 2.5 MW each. The International Finance Corporation (IFC) was the Lead Transaction Advisor for designing and implementing the transaction. The power generated under the Project will be sold at the bidded tariff to Torrent Power Limited (“TPL”), a privately owned distribution company that holds the license for electricity distribution in Gandhinagar and several other cities in Gujarat. Azure Sun won the bid at a quoted tariff of (through a 25-year Power Purchase Agreement) US$ 0.208/Unit (INR 11.14 per unit @53.44 INR/USD). Financial closure was achieved on 24th May 2013. The project was estimated to cost US$ 5 million at the time of financial closure. IFC provided a loan of US$ 3mn and equity of US$1mn. The residual equity of US$ 1mn was brought in by US$ 1mn.