Azure Wins 2 GW Solar Capacity in SECI’s Manufacturing-Linked Tender

Azure Power has received an LOA for a 2 GW ISTS solar power project with SECI to supply power for 25 years at a tariff of Rs 2.92 per kWh.

A leading solar power producer in India, Azure Power has announced that it has received a letter of award (LOA) for a 2 GW interstate transmission (ISTS) solar power project with Solar Energy Corporation of India (SECI) to supply power for 25 years at a tariff of Rs 2.92 per kWh. The capacity was awarded under SECI’s 7 GW manufacturing-linked solar tender.

The solar power project can be developed anywhere in India and is expected to be commissioned in staggered annual phases of 500 MW each with the first commissioning expected by 2022 and full commissioning by 2025. The power purchase agreement (PPA) allows for the waiver of ISTS transmission charges and improved protections from curtailment. As part of the LOA, the company can elect in the next 5 days to double the capacity allocated as part of a greenshoe option.

The project also comes with a 500 MW cell and module manufacturing capacity requirement. Azure Power has an agreement in principle with a leading Indian solar panel manufacturer to take a majority ownership stake of this manufacturing requirement and the total investment requirement by the company is expected to be limited to 26 percent of equity investment.

Ranjit Gupta, chief executive officer, Azure Power said that “this opportunity is attractive to us for many reasons. The tariff is 8 percent higher than the last discovered tariff for an ISTS project with SECI which is one of the best solar counter-parties in India. Now with a 5 GW portfolio, our scale and the predictability of our growth over the next five years should allow us to capture significant efficiencies.”

Recently, the firm had announced its consolidated results under the United States Generally Accepted Accounting Principles (GAAP) for the fiscal second quarter of 2020, the period ended September 30, 2019. Reporting an increase in revenue of 28 percent year-over-year.

As per the results, revenue for the quarter was Rs 284.66 crore (USD 40.3 million), an increase of 28 percent over the quarter ended September 30, 2018. Revenue during the six months ended September 30, 2019, was Rs 623.59 crore (USD 88.3 million), an increase of 34 percent from Rs 464.82 crore during the same period in 2018. The firm claims that the increase in revenue was primarily driven by the commissioning of new projects.