New Delhi: Attracted by India’s growing clean energy play, GE Energy Financial Services (GEEFS) is expanding its Indian renewable energy portfolio and plans to invest $90 million to develop a solar power project portfolio of 500 megawatt (MW) with RattanIndia Group.
GE’s investment in the Indian project comes at a time when financing at the lowest cost has become the key to success, with bids falling almost by the day (projects are awarded to the firm that agrees to charge the lowest tariff).
GEEFS has made investment commitments of around $15 billion globally.
“RattanIndia and GEEFS are partnering to develop 500MW solar assets in the ratio of 51:49. GEEFS will be investing $90 million for the 500MW solar portfolio and has already invested money in 210MW solar projects of RattanIndia located in Government Solar Parks at Bhadla (Rajasthan), Allahabad (Uttar Pradesh), Pavagada (Karnataka) and in RattanIndia’s own land at Katol (Maharashtra),” said Anjali Rattan, chief executive office of RattanIndia Solar, in an emailed statement.
India has an ambitious clean energy target of adding 175 gigawatts (GW) by 2022 and has announced its intent to stay the course on its commitments to reduce carbon emissions despite the US’s withdrawal from the Paris climate agreement on grounds the deal favoured India and China and was unfair to the US.
“GE Energy Financial Services’ investment will provide dry powder to RattanIndia Group to bid for future solar power projects,” said a person aware of the development on condition of anonymity.
GEEFS has previously invested in Welspun Renewables Energy Pvt. Ltd’s Neemuch plant, Atria Power wind projects at Anantapur district of Andhra Pradesh and Betul district of Madhya Pradesh, and Greenko Group Plc.’s wind projects in India.
Spokespersons for GEEFS and GE India did not respond to emails seeking comment.
The solar energy business in India has seen a significant decline in tariffs from Rs10.95-12.76 per kilo-watt hour (kWh) in 2010-11. They hit a new low of Rs2.44 per unit in May at the auction of 500MW capacity at the Bhadla solar park in Rajasthan.
Last year, RattanIndia Solar won a 50MW solar project at a tariff of Rs4.43 per kWh.
Through its subsidiary Yarrow Infrastructure Ltd, it also won a 70MW solar project at a tariff of Rs4.36 per kWh in an NTPC Ltd-run e-auction.
Rajiv Rattan co-founded the Indiabulls Group in 1999. In July 2014, the power and infrastructure businesses were split from Indiabulls and rebranded RattanIndia, with Rattan as chairman.
RattanIndia group has thermal power plants with installed capacity of 2,700MW and renewable plants totalling 300MW.
It sells most of the renewable power produced at its plants to central government entities such as NTPC and Solar Energy Corp. of India Ltd.
“All future capacity addition of the Group will be done under renewables segment only and the capacity of RattanIndia Group will be scaled to 5,000MW in near term”, said Anjali Rattan.
India’s installed solar power generation capacity has risen over fourfold to 12.2GW from 2.6GW as of 26 May 2014. The National Democratic Alliance government has been promoting solar power in the country. As part of this push, it has decided to continue the policy of exempting solar power producers from interstate supply charges till December 2019.
“The decision was taken by the ministry of power in consultation with the Ministry of New and Renewable Energy and other stakeholders since imposition of charges would have raised cost of using solar power from another state by Rs1-2.50 per kWh, depending on the distance it is transmitted and voltage at which it is supplied,” India Ratings and Research wrote in a 28 June report.