Beruflich Dokumente
Kultur Dokumente
MONTHLY UPDATE
Vol. I
Issue IV
March 2016
Creating value,
partners in growth
Incorporated in 1997, LSI Financial Services Private Ltd
(LSI) is a leading provider of innovative financial solutions
in India and abroad.
It has successfully raised funds for companies through
structured financial products, spanning various sectors.
With in-depth domain knowledge, LSI strives to add value
to the client's financial supply chain ensuring an effective
and efficient capital structure. It is also providing Project
Advisory services including preparation of Detail Project
Reports (DPR) and Techno Economic Feasibility/Viability
Reports (TEFR/TEVR) on behalf of Banks, Public and Private
Sector Institutions and Companies.
Issue Management
Due Diligence
Valuation of Assets/Equity
EDITORIAL
Securitization as a Future Financing Tool for Solar Projects
India has massively scaled up targets for the solar industry to 100
GW of solar power by 2022. Rapid expansion has now led the industry
to tap every available means of financing in a bid to stay competitive,
amid aggressive bids for solar projects, falling solar tariffs and an
uneven playing field comprising both domestic and foreign players.
While the Indian solar sector continues to enjoy a host of benefits
from the Government in the form of subsidies and incentives, foreign
investments too are pouring in as they enjoy automatic approval for
up to 74% in joint ventures and 100% investments with approval.
Viability gap funding is also available for public-private partnerships.
In this scenario, it is imperative for players across the industry to find financing on terms that are
competitive with global players. At this juncture, we believe securitization offers a convenient and
comprehensive off-balance sheet financing tool to meet exactly these needs of an emerging solar
market.
LSI Financial Services Pvt. Ltd., with its two decades of experience in debt syndication and project
financing, opines that infrastructure projects such as road and solar power are likely to benefit the
most from securitization, as the future cash flows either in the form of tolls for roadways and
monthly electricity charges for power sold in the case of solar, are predictable cash flows that can be
securitized with minimal risk. Solar projects can either securitize cash flows from a Power Purchase
Agreement (PPA) or pool together a combination of debt financed solar projects to make a pool of
debt assets.
Financing through the securitization route has taken firm ground in the US and some of the other
countries. Indian solar companies and financiers too have already tested the waters on this mode of
financing. As early as 2011, the energy unit of the Welspun Group, India's leading photovoltaic
developer, backed by the Apollo Global Group, was approached by ICICI bank to securitize revenue
from its 15-megawatt unit in Gujarat after three months of operation. In December 2015, the Indian
Renewable Energy Development Agency (IREDA) has introduced this mode of financing for
companies that have a track record of good performance of 3 years, relaxable to 2 years, for projects
running successfully and with a DSCR averaging 1.4 for the two years.
Moody's Investors Service says that the development of domestic securitization markets will help
India and China achieve their common goal of building inclusive financial systems that will ultimately
bring affordable credit to the underprivileged segments of their societies, as these are usually
excluded from the conventional banking system. It is however, a trend that is yet to catch on in India
and worldwide as well, given the complex nature of securitization that has hindered players and
financiers from adapting to it easily. Moreover, with the presence of Government backed incentives
and abundant early stage financing, the industry is yet to tap the full potential of this powerful
instrument, which, according to us, could prove a game changer in the financing of solar industry in a
few years.
Raj Kajaria,
Managing Director, LSI Financial Services Pvt. Ltd.
ANNEXURE
Karnataka
Rest of India
1,488.78
697.42
10.00
66.00
84.00
MNRE
Projects
4.22
96.63
9.00
110.51
Pvt. initiative
(Rooftop)
CPSUs
140.00
RPO
State
Policy
REC
Scheme
Table 1 : Karnataka Proposed Solar Parks as joint venture between SECI, and KREDL
Name of the Park
Proposed
Capacity (MW)
Identified
Land Area
800
400
400
Location
Source: MNRE
573
Alloted
500
Commissioned
400
Cancelled
Capacity,
70 MW
Balance Alloted
Capacity to be
Commissioned,
930 MW
Source: MNRE
300
200
100
130
80
5
17
FY2012-13
FY2013-14
53
FY2014-15
24
40
FY2015-16
(till Jan 2016)
Source: KREDL
5
Subsidy
Wheeling charges
Banking charges
Source: KREDL
Availability of banking
Annual Basis
Source: Deloitte
Karnataka
Tamil Nadu
AP
Telengana
Kerala
Availability of Banking
Annual basis
Monthly basis
Annual basis
Banking Charges
Zero
Zero
Zero
(up to March 2018)
5% of energy
Zero
Zero
Rs.9.56/kWhr
Payment at APPC
Electricity Duty
No Exemption
Exempted
Exempted
No clearance/ NOC
required for PV
Facilitation provided by
TEDA
Clearance within
a week
No clearance/ NOC
required for PV
Annexure
Table 2 : List of LOAs issued to the successful bidders quoting prices upto to Rs.5.50 per kWh for
implementation of 1200MW capacity Solar Grid Connected Power Projects in 60 taluks.
(Tender Notification No. KREDL/07/RPO/GC/RFP/2015-16/ dated 13.11.2015)
No.
Taluk
District
Capacity
(in MW)
Madhugiri
Tumkur
20
4.69
Mulbagal
Kolar
20
4.86
Holalkere
Chitradurga
20
4.89
Harapanahalli
Davanagere
4.89
Hosadurga
Chitradurga
20
4.97
Kannakapura
Ramanagara
20
4.98
Honnali
Davanagere
20
5.05
Harapanahalli
Davanagere
5.07
Gowribidanuru
Chikkaballapura
20
5.19
10
Nagamangala
Mandya
15
5.19
11
Chikkanayakanahalli
Tumkur
20
4.69
12
Turuvekere
Tumkur
20
4.84
13
Harapanahalli
Davanagere
14
4.95
14
Chikkabalapura
Chikkabalapura
10
5.04
15
Koratagere
Tumkur
20
4.69
16
Bangarpet+KGF
Kolar
20
5.47
17
Chamrajanagara
Chamrajanagara
20
4.75
18
Kollegala+Hannur
Chamrajnagar
20
4.79
19
Gundlupet
Chamrajnagar
20
4.86
20
Yadgiri
Yadgiri
20
4.85
21
Bhalki
Bidar
20
4.85
Quoted tariff
(in Rs./kWh)
22
Chincholli
Kalburgi
20
4.84
23
Alland
Kalburgi
20
4.86
24
Shorapur
Yadgir
10
5.35
No.
Taluk
District
Capacity
(in MW)
Quoted tariff
(in Rs./kWh)
25
Shorapur
Yadgir
10
5.13
26
Shahpur
Yadgir
20
4.69
27
Chittapura
Kalburgi
20
4.83
28
Devadurga
Raichur
20
4.76
29
Siraguppa
Bellary
20
4.76
30
Humnabad
Bidar
20
4.86
31
Gangavati
Koppalaa
20
4.69
32
Indi
Vijayapura
20
5.20
33
Basavanabagevadi
Vijayapura
20
5.48
34
Sindagi
Vijayapura
15
5.44
35
Bijapura+Nagatana
Vijayapura
20
5.30
36
Naragund
Gadag
20
5.48
37
Chikkodi
Belgaum
20
5.46
38
Sindagi
Vijayapura
5.50
39
Shiggaon
Haveri
20
5.03
40
Muddebihal
Vijayapura
20
5.40
41
Ramadurg
Belagavi
20
4.92
42
Shirahatti
Gadag
20
4.97
43
Ron
Gadag
20
5.00
765
Source: KREDL
Director's Quote
Key Financials
According to a filing for an initial public offering
(IPO) on the New York Stock Exchange to raise
$100 million (approximately Rs.650 crore), for FY
2014-15, Azure Power reported a revenue of
Rs.112.4 crore and a loss of Rs.108.8 crore. The
firm has raised over $525 million in equity and
debt financing and approximately $102 million of
the amount raised remains available for
Director's Quote
In 2009, when I said that India would have two to three gigawatts [of solar energy] by 2015, people said
'That's not possible.' Today we have 5GW running, said Inderpreet Wadhwa, founder and chief executive
of Azure Power. Mr Wadhwa left a technology career in California after he came home to India on what
was supposed to be a short personal trip eight years ago and saw the huge opportunities presented by
the shortage of electricity. He started with small solar plants for electricity-hungry districts and rooftop
systems for companies to replace costly diesel generators. Today, Azure Power, which is part-owned by
the World Banks International Finance Corporation, Foundation Capital and Helion Ventures - is one of
dozens of domestic and international corporations putting money into building or supplying equipment to
large-scale solar PV power stations across India. (Sourced from article in Financial Times dated January 4, 2016, titled
Investors look to India as the next Solar Power).
*Note: All information sourced for the Company Limelight is taken from the company website www.azurepower.com, various
newspapers and media articles, which are in the public domain.
10
State
JNNSM
Andhra Pradesh
Neyveli Lignite
Corporation Limited
Tamil Nadu
Neyveli Lignite
Corporation Limited
Rajasthan
SECI
Odisha
NTPC
Capacity
Technical Bid
Date
02.03.2016
08.03.2016
08.03.2016
10.03.2016
Karnataka
18.03.2016
Karnataka
UPNEDA
UP
NTPC
Karnataka
01.04.2016
NTPC
Karnataka
5.04.2016
SECI
Chhattisgarh
20.04.2016
Kerala State
Electricity Board
(KSEB)
Kerala
28.04.2016
SECI
UP
Rewa (RUMPL)
MP
20 MW EPC Retender
11
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