MEMC Rawara Solar Plant

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SunEdision Energy India Private Limited (SEIPL), the Indian subsidiary of SunEdision LLC of US, was awarded the license for setting up a 5MW grid connected solar Photo voltaic power project at Rawara village, Phalodi Tehsil in Jodhpur District of Rajasthan under the Jawaharlal Nehru Solar Mission (JNNSM) Phase-I of the scheme. Under the JNNSM the total aggregated capacity of grid connected Solar Projects in Phase-1 was expected to be 1000 MW. The deployment of Solar PV and Solar Thermal projects would be in the ratio of 50:50. The project was spread over 44 acres and would use thin-film PV technology. The plant was expected to generate 8,000,000 KWh of electricity in its first full year of operation. The output from the project would be fed to the northern grid of India. SEIPL would procure equipment from Sharp Corporation. L&T would execute the EPC work. SEIPL had taken the approval from Powergrid for interconnection with the nearest substation of Powergrid at the volatage level of 33kV or above. The JNNSM mission had designated NTPC’s Vidyut Vyapar Nigam Limited (NVVN) as the nodal agency for procurement of solar power. On 18th August 2010, NVVN invited RFQs from interested developers to develop 150 MW solar PV projects with a capacity of 5 MW each, and 500 MW solar thermal projects with a minimum capacity of 5 MW and maximum of 100 MW each. NVVN received 418 RFQ responses on September 24, 2010 from both PV and solar thermal project developers (343 applications for solar PV,55 for solar thermal projects, and 5 for combined thermal and PV projects). As the total capacity of the shortlisted projects were in excess of the approved capacity of 150 MW Solar PV Projects and 500 MW Solar Thermal Projects, bidders were required to submit proposals offering maximum discount on the CERC (Central Regulator) approved applicable tariff for grid connected solar power projects for FY 2010-11 - a reverse bidding auction process. The last date for the submission of proposal was November 16, 2010. For Solar PV projects, NVVN received 299 bids from project developers indicating discounts offered by each over CERC determined tariff of US$ 0.398/kWh (INR 17.91/kWh @45 INR/USD).Majority of the bids were between 300 and 500 paise. There were 69 bids where bidders decided against developing solar projects. Since the target allocation for solar thermal projects was 150 MW, only the top 30 discounts were finally selected to set up solar power projects. The cutoff discount was 515paise. SunEdision Energy India Private Limited (SEIPL) won the project by quoting a tariff of US$ 0.275/KwH (INR 12.39/kWh - a discount of 552 paise). In January 2011, SEIPL had entered into a 25-year Power Purchase Agreement with NTPC Vidyut Vyapar Nigam (NVVN), which was the the nodal agency to purchase solar power generated by independent solar power producers,under JNNSM. JNNSM provided for a scheme of "bundling" relatively expensive solar power with cheaper power from the unallocated quota of the Government of India out of the capacity of the NTPC based coal stations.This cheaper bundled power would then be sold to state power distribution companies at the CERC regulated price. This would bring down the gap between the average cost of power and sales price of power of the state Discom. The total capacity of 5MW was also eligible for carbon credits. SEIPL would pass on the gross benefits of CDM to the distribution licensee (NVVN) in the following manner - (a) 100% of the gross proceeds to be retained by SEIPL in the 1st year after the date of COD, (b) in the 2nd year, the share of NVVN would be 10% which would be progressively increased by 10% every year till it reached 50%, where after the proceeds would be shared equally by SEIPL and NVVN.Transmission and/or wheeling charges would be paid by SEIPL. Financial closure took place on 6th July 2011.The total project cost was US$ 14.6mn (INR 688mn @47 INR/USD).The debt equity ratio for the project was 64/36. Financing com