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Analysis of Winning Bids under National Solar Mission Phase II

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Information about Analysis of Winning Bids under National Solar Mission Phase II
Business & Mgmt

Published on February 28, 2014

Author: AnmolJaggi

Source: slideshare.net

Description

National Solar Mission bids in one word are 'Ratioanale' this time & this would go a long way in making the Solar projects bankable and lead to a a high quality return for investors.

The documents provides qualitative & quantitative analysis of the Winning Bids for National Solar Mission
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VGF  Allocations: A Tale of Rationality!                             Bidding  results:  A  snapshot       • Oversubscription: While the open category was oversubscribed by almost 4 times (1390 MW), the Domestic Content Requirement (DCR)* category was oversubscribed by over one and half times (620 MW). Notably, DCR mandates uses of both solar modules and the cells of Indian make.   • • Key players: Notable players like ACME (60 MW), Azure (100 MW), Belectric (10 MW), IL&FS (40 MW), Solairedirect (30 MW), SunEdison (100 MW) have been able to etch a substantial mark in the tally, with over 45% of the total capacity that was on offer, while solar major Welspun has been able to get 5 MW. Categorywise, Azure has secured the largest share under the DCR category, while ACME emerged as the largest developer in the open category, with 60 MW each. Piquantly, Hero Group, which has a good presence in the renewable energy space, has been able get a 4% share of the entire basket of allocations at 30 MW. Real estate major Group Today’s Today Homes and Infrastructure Pvt. Ltd. appears to have made a conspicuous debut in the Indian solar industry with 50 MW coming in its share.   • Preferred destinations: It appears that Rajasthan and Madhya Pradesh are the most coveted destinations for the project developers. Out of the 21 allocations in the DCR category, 43% (9) and 14% (3), are expected to be raised in Rajasthan and MP, respectively. On the other hand, the scenario is reverse in the open category where 25 allocations have been registered, with 32% (8) of the projects falling in MP and 28% (7) expected to come up in Rajasthan.     •   • Surplus VGF funds: Piquantly, bidders have been able to absorb only 64% of total available funding of Rs 1875 crore (USD 307.4 mn) under this programme, creating a surplus of 36%. While the DCR allocations amount to Rs 799 crore (USD 131 mn), the corresponding figure for open category is pegged a little over Rs 401 crore (USD 65.7 mn). It remains to be seen how the surplus would be appropriated.   Geometry of bids: The lowest bid and highest in the open category were Rs 0.17 crore/MW (USD 0.03 mn) and Rs 1.35 crore/MW (USD 0.22 mn), respectively, whereas the weighted average winning VGF bid comes out to be Rs 1.0710 crore/MW (USD 0.175 mn). In parallel, the lowest, highest and weighted average winning bids for DCR are Rs 1.36 crore/MW (USD 0.22 mn), Rs 2.456 crore/MW (USD 0.4 MW) and Rs 2.1309 crore/MW (USD 0.35 mn), respectively. Disclaimer:  The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.   W:  www.gensol.in  |  P:  +91  7878  025010  +91  79  40068236-­‐9  |  E:  solar@gensol.in   205  -­‐  206,  Sarthik  II.  Opp.  Rajpath  Club,  S  G  Highway,  Ahmedabad,  Gujarat  –  380015    

VGF  Allocations: A Tale of Rationality!   The  bottom  line:  Although  open  category  is  oversubscribed  in  a  much  grand  way,  returns  lie  in  the  DCR   category                 DCR Category Bid type Weighted Average Minimum Maximum • • • Project Cost (Rs Crore/MW) Winning bids (Rs crore/MW) 6.4 6.7 2.1309 15.59% 14.01% 1.3600 12.33% 11.04% 2.4560 17.16% 15.44% As apparent from the table above, it comes out that in the DCR category, the lowest bid of Rs 1.36 cr/MW (USD 0.22 mn) is expected to earn equity IRR of over 12% at a project cost of Rs 6.4 crore/DC MW (USD 1.05 mn), whereas around 11% at a corresponding cost of Rs 6.7 cr/DC MW (USD 1.1 mn). Moreover, the highest bid of Rs 2.4560 cr/MW (USD 0.4 mn) is expected to earn handsome returns of over 17% with Rs 6.4 cr/DC MW as the project cost and over 15% with a project cost of Rs 6.7 cr/DC MW. In this category, the approximations on highest, lowest and average returns can be expected to be around 17%, 11% and 14%, respectively.   Disclaimer:  The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.   W:  www.gensol.in  |  P:  +91  7878  025010  +91  79  40068236-­‐9  |  E:  solar@gensol.in   205  -­‐  206,  Sarthik  II.  Opp.  Rajpath  Club,  S  G  Highway,  Ahmedabad,  Gujarat  –  380015    

VGF  Allocations: A Tale of Rationality! Open Category Winning bids (Rs crore/MW) Bid type Weighted Average Minimum Maximum • • • Project Cost (Rs Crore/MW) 6.0 6.3 1.0710 13.05% 11.68% 0.1700 9.80% 8.74% 1.3500 14.23% 12.75% For the open category, the table above builds a view that the lowest bid of Rs 0.17 cr/MW (USD 0.03 mn) is likely to translate into not-so-good returns of close to 10% at a project cost of Rs 6 crore/DC MW (USD 0.98 mn), while further lower returns of close to 9% at a corresponding cost of Rs 6.3 cr/DC MW (USD 1.03 mn). Alongside, the highest bid of Rs 1.35 cr/MW (USD 0.22 mn) is expected to earn good returns of over 14% with Rs 6 cr/DC MW as the project cost and around 13% with a project cost of Rs 6.3 cr/DC MW. In this category, the approximations on highest, lowest and average returns can be expected to be around 14%, 9% and 12%, respectively.     Disclaimer:  The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.   W:  www.gensol.in  |  P:  +91  7878  025010  +91  79  40068236-­‐9  |  E:  solar@gensol.in   205  -­‐  206,  Sarthik  II.  Opp.  Rajpath  Club,  S  G  Highway,  Ahmedabad,  Gujarat  –  380015    

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