Solar Semiconductor Power Company (India) Private Limited

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A consortium of Solar Semiconductor Private Limited (51%) and NSL Renewables Power Private Limited(49%),signed an MoU with Gujarat Energy Development Agency (GEDA) for setting up a 20-MW photovoltaic solar project in Kutch district in the state of Gujarat, under the Gujarat Solar Policy 2009. The output from the project would be fed to the North-East-West-North-East (NEWNE) grid of India through the state grid. The project has deployed amorphous silicon (a-si) based PV panels. PV panels and inverters for the project had been sourced from the Taiwan-based Sun well Corporation and Italy-based Elettronica Santerno SpA. Power evacuation was planned through a 66KV line to substation, which, as per the state policy, was the responsibility of Gujarat Energy Transmission Corporation Limited (GETCO). SSPL (51%) and NSLRPPL (49%) established Solar Semiconductor Power Company (India) Private Limited (SSPCL), special purpose vehicle, to execute the project. SSPCL had entered into a 25-year Power Purchase Agreement with the state utility Gujarat Urja Vikas Nigam Limited (GUVNL), at a fixed tariff of INR 11.25/unit for the first 12 years and INR 7.5/unit for the remaining 13 years. For payment security mechanism GUVNL had established a revolving letter of credit equivalent to an average monthly billing. The project’s economic interest was protected if GUVNL defaulted and subsequently terminated the contract. The off-taker was liable to pay SSPCL an amount equivalent to three years billing based on the first-year tariff considered on normative plant load factor (PLF) of 20%. A 12-year operations and maintenance contract was executed with Lanco Solar Services Private Limited.The fixed-base price with a pre-determined annual escalation (5%) of costs in the contract mitigated uncertainty on operating costs. The project was executed at a cost of US$ 43.4mn (INR 2320.5mn @53.44 INR/USD).The debt equity ratio for the project was 65/35. Financing comprised of Debt of US$ 28.1mn (INR 1500mn) and sponsor equity of US$ 15.4mn (INR 820.5mn). The project was financed initially using sponsor equity and buyer’s credit. The buyer’s credit was subsequently refinanced by a long-term bank loan in July 2014. The 6-year 5-months term loan was arranged by Axis Bank (INR 680mn) and Aditya Birla Finance (INR 680mn). The plant was commissioned in June 2012.