SEI Solar Power Jodhpur Solar Project

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In December 2011, SEI Solar Power Private Limited (SEI), was awarded the license for setting up a 20MW grid connected solar Photo voltaic power project located at Phalodi, in Jodhpur District of Rajasthan under the Jawaharlal Nehru Solar Mission (JNNSM) Phase-I Batch-II of the scheme. SEI Solar Power was a joint venture between SunEdison Energy Holding (Singapore) Pte. Ltd. and Astronergy Solar Korea Co. Ltd. (a CHINT Group company). 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. 150MW aggregate has already been allotted in FY2010-11 as a part of Batch-I of JNNSM Phase-I, and allotment for the remaining 350 MW Solar PV Projects was carried out through the second batch. SEI had acquired land for the project. The output from the project would be fed to the northern grid of India. The JNNSM mission had designated NTPC’s Vidyut Vyapar Nigam Limited (NVVN) as the nodal agency for procurement of solar power. In October 2011, NVVN invited RFQs from interested developers to develop 350 MW solar PV projects with a capacity of 5 MW each, with a minimum capacity of 5 MW and maximum of 50 MW each. NVVN received 210 RFQ responses on 17th November 2011 from PV solar project developers. As the total capacity of the shortlisted projects were in excess of the approved capacity of 350 MW Solar PV 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 2011-12 - a reverse bidding auction process. The last date for the submission of proposal was December 2011. NVVN received 180 bids from project developers indicating discounts offered by each over CERC determined tariff of US$ 0.329/kWh (INR 15.39/kWh @46.67 INR/USD). The winning bids for solar PV under Batch-II of JNNSM Phase-I varied from INR 7.49/kWh to INR 9.41/kWh, at an average bid price of INR 12.15/kWh. Since the target allocation for solar thermal projects was 350 MW, only the top 20 discounts were finally selected to set up solar power projects. SEI won the project by quoting a tariff of US$ 0.198/KwH (INR 9.28/kWh, a discount of 611 paise). In January 2012, SEI 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 un-allocated 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. Transmission and/or wheeling charges would be paid by SEI. Financial closure reportedly took place in November 2012.The total project cost was estimated (based on newspaper reports) at US$ 50.6mn (INR 2705mn @53.44 INR/USD).The debt equity ratio for the project was 70/30. Financing comprised of a term loan of US$ 34.3mn (INR 1833mn) and sponsor equity of US$ 16.3mn (INR 872mn). IFC provided the term loan of US$ 34.3mn. Construction for the project started in January 2012 and commercial operation for 20MW started on 11th February 2013.