Clean Sustainable Solar Energy Private Limited

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In March 2014, Welspun Energy Private Limited (WEPL), was awarded a contract for setting up a 50-MW photovoltaic solar project at Shirsupal, in Baramati taluka of Pune district in the state of Maharashtra. The 50 MW capacity would be installed in two phases - Phase-I of 36MW would be installed on 74.74 hectares of government land. Balance 14MW capacity will be installed after acquisition of balance 29.97 hectares required for the project. The output from the project would be fed to the North-East-West-North-East (NEWNE) grid of India. The project would deploy thin-film technology. Power evacuation was planned through a 66KV line to substation, which, as per the state policy, was the responsibility of Maharashtra state transmission utility. Welspun Energy Private Limited had established Clean Sustainable Solar Energy Private Limited (CSSEPL) in March 2014, to execute the project. CSSEPL had entered into a 25-year Power Purchase Agreement with Maharashtra State generation company (Mahagenco), which was the agency to purchase solar power generated by independent solar power producers. The PPA would be effected at the time of commissioning of the project. In February 2014, Mahagenco had received expressions of interest from Tata Power, Welspun Energy and Essel Power to set up the 50MW solar unit. For the project, Mahagenco would arrange the land, the necessary approvals, and distribution infrastructure. Further, Mahagenco would pay INR 30mn/MW as its contribution till the commissioning of the project. This amounted to a grant of US$ 24.6mn (INR 1500mn @61 INR/USD) for the project. Once the project was commissioned and started generating revenue, the developer would have to share some percentage of the income with the company. WEPL had emerged as the highest revenue sharing bidder by offering 38.75% revenue share over a period of 25 years with a guaranteed revenue from the project at 19% capacity utilization factor (CUF) annually. The tariff would be as per the prevailing MERC tariff order applicable for solar projects. WEPL would be fully responsible for part finance, design, engineering, manufacturing, supply, erection, testing and commissioning of this grid connected solar power, including operation and maintenance for 25 years. Transmission and/or wheeling charges would be paid by CSSEPL. The project attained financial closure on 10th October 2014 with a grant/debt/equity ratio of 40/45/15. The estimated project cost at the time of financial closure was US$ 61.5mn (INR 3750mn @61 INR/USD). Apart from the grant of INR 1500mn from Mahagenco (which in turn was in form of a soft loan from German deveopment bank KfW), financing comprised of Debt of US$ 27.7mn (INR 1687.5mn) and sponsor equity of US$ 9.2mn (INR 562.5mn). The 13-year 6-months term loan was provided by Bank of India. The plant construction started in July 2014 and was commissioned in December 2014. The soft loan was provided by KfW Germany through Government of Maharashtra.