Finance

Residential Rooftop Solar To Cost Rs 31,200/Kw In Andhra Pradesh after Subsidy

The Andhra Pradesh Eastern Power Distribution Corporation Limited (APEPDCL) has discovered the lowest bid of Rs. 50,000/kW for up to 1 kW of residential rooftop solar systems. That means, after central subsidies, it would cost only Rs. 31,200 to consumers. Interestingly, for larger 100Kw to 500Kw sizes, the discovered price is Rs 36,000/Kw , though not eligible for any subsidies.

APEPDCL floated a tender for selecting agencies to install the residential rooftop solar systems under the capital expenditure (CAPEX) model and selected the 17 lowest bidders. Out of the 17 bidders, 14 are assigned to install systems with capacities from 1 kW to 10 kW. Two agencies are selected to install systems of 2 kW to 500 kW, and one agency to install 10 kW to 500 kW systems.

The lowest quoted project cost for a rooftop solar system up to 1 kW was Rs. 50,000/kW, Rs. 47,000/kW for a 1 kW to 2 kW system, for a 2 kW to 3 kW system it was Rs.45,000/kW, and for a 3 kW to 10 kW system lowest cost was Rs. 44,000/kW.

Consequently, for the systems of 10 kW to 100 kW, the lowest project cost quoted was Rs. 38,000/kW and Rs. 36,000/kW for systems of 100 kW to 500 kW.

As per the MNRE’s (Ministry of New and Renewable Energy) order for Approved List of Models and Manufacturers (ALMM), vendors with domestically manufactured solar panels who are listed under ALMM will be sanctioned with the central financial assistance (CFA) for the systems. The CFA of 40% on the benchmark cost will be provided for systems up to 3 kW. Thus, for a 3 kW system, the final price will be around Rs 90,000 after subsidies. Of course, discoms might yet add on costs like meter charges for solar bi-directional meters, etc, but that will still keep costs to a very reasonable level.

For systems above 3 kW and up to 10 kW, a CFA of 40% will be applicable for only the first 3 kW capacity, and for others, it will be 20%. For group housing societies and residential welfare associations, the CFA will be restricted to 20% for common facilities up to 500 kW. Thus, with net metering for a household that is paying say, Rs 2,500 per month, payback on a 3 KW system could come as early as 4 years. On a system with a warranty of 5 years, and notional life of 25 years.

According to APEPDCL, a subsidy of Rs. 18,800 would be provided for a 1 kW rooftop solar system considering a 40% subsidy on MNRE’s benchmark cost of Rs. 47,000. Conclusively, after subtracting the subsidy amount from the cost of a 1 kW rooftop system, the cost for the consumer would be Rs. 31,200.

Last week, APEPDCL announced that residential customers interested in installing grid-connected rooftop solar (RTS) plants in Andhra Pradesh would now be entitled to receive central financial assistance (CFA). Back in 2019, APEPDCL has filed a petition with the Andhra Pradesh Electricity Regulatory Commission (APERC) seeking approval for the implementation of a discom driven solar rooftop program devised under the technical assistance titled ‘Power Sector Reform Program’ supported by the UK’s Department for International Development (DFID).

Sterling and Wilson Solar Q4 2021 Results-Heavy Losses

The Shapoorji Pallonjee Group’s Sterling and Wilson Solar, on Tuesday, announced their March results and the story is not good. Having already informed exchanges about hits the firm took in the quarter from a contractor’s bankruptcy, and other issues, the firm slipped into losses for the year. The firm had earlier issued a warning regarding impact from contractual issues in Q4.

The total income of the company in the March quarter stood at Rs 1,416.33 crore, down from Rs 2,120.50 crore in the year-ago period.

The firm’s (standalone) net loss before tax of Rs 134.77 crore for the quarter that ended March 31, 2021. The company, SWSOLAR, on the other hand, reported (standalone) profit before tax of Rs 229.68 crore in the corresponding quarter i.e Q4 ’20. Consolidated losses for the quarter hit Rs 344 crores.

Its expenses also dropped, from Rs 1,961.40 crore a year earlier to Rs 1,816.79 crore. The Group continues to have a solid order book, good net worth, and a favourable net current asset position, which might be the only silver lining for its investors. The Company’s management and Board of Directors have also assessed the Group’s capacity to continue as a going concern, as well as its expected cash flows for the next 12 months and financing arrangements to meet its working capital needs and essential capital expenditure.

Trade receivables from a customer aggregating to Rs 92.45 crores which were outstanding as at 31 March 2021 have also been provided for with an expected credit loss provision of Rs 31.33 crores, although the auditor is skeptical about it.

Thus, while the solar EPC business suffered a de growth of over 10 percent from Rs 5391 crores to Rs 4825 crores for the year, Solar O&M, touted as a key focus area for its dependable revenues, grew 37 percent from Rs 183 crores in 2019-20 to Rs 252 crores in 2020-21.

For new global CEO, Amit Jain, and the firm itself, hopes will be high that the change will lead to a change in fortunes too. The solar epc business, with its shorter contract time frames puts pressure for a contracts pipeline, but at the same time, the opportunity for a quick turnaround is always there, as a firm can make corrections quickly.

EXIM Bank Extends $40 M to Togo to Power 350 Villages with Solar PV

Export-Import Bank of India has, on behalf of the Government of India, extended a Line of Credit (LOC) of USD 40 million to the Government of Togo for the purpose of the electrification of 350 villages in Togo through solar photovoltaic systems. India has been on a major outreach among developing countries ever since it became a founding member of the International Solar Alliance, along with France.

The LOC Agreement to this effect was signed by Mr. Sani YAYA, Minister of Economy and Finance, Government of Togo and Mr. G. Selva Kumar, Resident Representative, Exim Bank’s Abidjan Representative Office, in the presence of Ms. Mila AZIABLÉ, Minister of Mines and Energy, Government of Togo, and Mr. Praveen Chandra Kala, Charge d’Áffaires, Indian Embassy in Togo, in Lomé on June 23, 2021. According to the International Renewable Energy Agency, Togo had just 3 MW of solar generation capacity at the end of 2020. However, under the National Development Plan (NDP), its government is aiming for universal access to electricity this decade and for half of its power to come from clean energy sources. With the signing of the current LOC Agreement for USD 40 million, Exim Bank, till date, has extended five Lines of Credit to the Government of Togo, on behalf of the Government of India, taking the total value of LOCs extended to USD 150.10 million. The LOCs extended to the Government of Togo covers projects in sectors including rural electrification, farming, transmission lines and solar energy. Exim Bank now has 274 Lines of Credit in place, covering 62 countries in Africa, Asia, Latin America and the CIS, with credit commitments of around USD 26.98 billion, available for financing exports from India. Besides promoting India’s exports, Exim Bank’s LOCs enable demonstration of Indian expertise and project execution capabilities in emerging markets.

This month, the President of Togo, Faure Essozimna Gnassingbé, inaugurated a 50 MWp Solar Power Plant in the West African country. The Sheikh Mohamed Bin Zayed Solar Power Plant Project is being developed by AMEA Power, Dubai and designed, installed, commissioned, and executed by Jakson Group from India. The West African Development Bank and Abu Dhabi Fund for Development (ADFD) provided concessional loans for the project.

Earlier this month, Exim Bank of India had also extended a $100 million line of credit to Sri Lanka .

MDPs Committed Climate Finance Worth $66 B in 2020: Joint Report

According to the recently published 2020 Joint Report on Multilateral Development Banks’ Climate Finance, climate finance committed by major multilateral development banks (MDBs) rose to a total of $66 billion last year from $61.6 billion in 2019, of which, 58%—or $38 billion—was committed to low- and middle-income economies.

The total climate cofinance committed during 2020 alongside MDB resources was $85 billion. Together, MDB climate finance and climate cofinance totalled more than $151 billion. The amount of private direct mobilization stood at $5.9 billion.

Accelerating the transition to low-carbon and climate-resilient economies through climate finance is a key element of the MDBs’ effort to align their activities with the objectives of the 2015 Paris Agreement to keep global warming well below 2°C, with efforts to limit it to 1.5°C, along climateresilient development pathways. In the past 6 years, the MDBs have jointly committed a total of $257 billion in climate finance, of which $186 billion was directed at low- and middle-income economies.

The annual report is a key indicator on the progress MDBs are making on accelerating the delivery of climate finance, for which demand is clearly going to grow over time. This year’s report marks the end of the reporting period tracking individual climate finance pledges since 2015; for most, 2021 will mark the start of a new increase in ambition. In 2019, at the UN Secretary-General’s Climate Action Summit, MDBs announced their expected joint annual climate action finance to 2025. These include at least $65 billion, with $50 billion of MDB climate finance for lowincome and middle-income countries; an increase in adaptation finance to $18 billion; and private direct mobilization of $40 billion.

“The MDBs will continue to improve their tracking and reporting of climate finance in the context of their commitments to ensure consistent financial flows to the countries’ long-term, low-carbon and climateresilient development pathways, as established in…the Paris Agreement,” says the 2020 report, which is the 10th in the series.

Of the 2020 total of $66 billion, $63 billion came from the MDBs’ own accounts and almost $3 billion from external resources channelled through and managed by MDBs. These included the Climate Investment Funds, Green Climate Fund and climaterelated funds under the Global Environment Facility, EU blending facilities and others.

The 2020 financing helped play a key role in supporting countries to embed green and climate-focused solutions as part of their recoveries from the impact of the coronavirus disease (COVID-19). While these programmes affected MDBs’ normal lending operations and thus the delivery of their climate finance targets, seeing the total commitments for low- and middleincome countries dip from 2019’s $41.5 billion, the 2020 report says interventions and support from the MDBs laid a solid foundation for “building back better” for a greener, more resilient, post-COVID-19 future.

Nearly $50 billion (76%) of total MDB climate finance in 2020 was associated with climate change mitigation investments that aim to reduce harmful greenhouse gas emissions and slow down global warming. Of this, 50% went to low- and middleincome economies. More than $16 billion (24%) for climate change adaptation finance was invested in adaptation efforts to help countries build resilience to the mounting impacts of climate change, including worsening droughts and more extreme weather events, from flooding to rising sea levels. Of this, 83% was directed for low- and middle-income economies.

The 2020 MDB report, coordinated by the European Bank for Reconstruction and Development (EBRD), combines data from the African Development Bank, ADB, the Asian Infrastructure Investment Bank (AIIB), the EBRD, the European Investment Bank, the Inter-American Development Bank Group, the Islamic Development Bank and the World Bank Group. AIIB data is fully incorporated for the first time. As part of the MDBs’ ambition to extend and enhance climate finance reporting, the 2020 report also summarises information on climate finance tracking from the New Development Bank, presented separately from the joint figures and not yet included in the MDB climate finance total.

BlackRock raises $250 M for Climate Projects in Asia, Latin America, Africa

New York-based investment management company BlackRock has secured over $250 million from global investors and governments for the Climate Finance Partnership (CFP), which was introduced at the One Planet Summit in September 2018 under the leadership of French President Emmanuel Macron.

CFP is a flagship blended finance vehicle that is designed to invest in climate solutions and infrastructure, including renewables, across emerging markets in Asia, Latin America and Africa, wherein reside communities most vulnerable to the ongoing climate crisis.

The consortium of investors, which has issued a combined $112.5 million to the CFP, includes the Governments of France, through the French Development Agency (AFD); Germany, through KfW Development Bank (KfW); and Japan, through Japan Bank for International Cooperation (JBIC), as well as the Grantham Environmental Trust and the Quadrivium Foundation. Commitments have also been secured from European pension funds, including Dai-ichi Life Insurance and banks such as Standard Chartered and the MUFG Bank.

The CFP is aiming to generate at least $500m and claims to now be halfway to that target. Around $9 trillion is required to enable emerging markets to derive two-thirds of their energy demand from renewables by 2050, says Bloomberg NEF (BNEF). While $150 billion was invested in clean energy in developing economies last year, this amount needs to grow to $1 trillion by 2030 to achieve global net-zero emissions, according to the International Energy Agency (IEA). “This ambitious partnership, forged with Germany, Japan and leading global foundations, will help redirect financial flows toward sustainable development investments across the emerging world, with a priority to Africa as a key continent to France and Europe and one of the most vulnerable regions to climate change despite contributing the least to global warming,” said Remy Rioux, CEO of AFD.

CFP will focus investment on: gridconnected and/or distributed renewable power generation; energy efficiency in residential, commercial and/or industrial sectors; transmission or energy storage solutions; and ultra-low emission or electrified transportation and mobility services.

MYSUN Partners with TATA Cleantech Capital to raise Rs. 15 Crore

India’s rooftop solutions company, MYSUN, has partnered with TATA Cleantech Capital Ltd (TCCL), a joint venture between Tata Capital Limited and a US company International Finance Corporation, to raise Rs 15 crore in debt funding for its solar portfolio expansion.

The company had recently launched its solar asset vehicle MYSUN+ to develop solar projects under the distributed and open access models with an investment of Rs 600 Crores in the first phase. This term loan will be used to fund the existing projects of MYSUN+ and the credit line will be used to develop its pipeline projects.

Speaking of this partnership, the Founder & CEO of MYSUN, Mr. Gagan Vermani stated, “We have got a very promising traction in our newly launched asset vehicle, MYSUN+, and this funding from TCCL will help us de-leverage our equity capital and develop a larger pipeline of projects.”

Over the next few quarters, we are looking to develop about 200MW of projects which are currently at various stages of development. As the demand is expected to grow exponentially, we are actively looking at EV charging and some newer product lines too.” he added.

While TCCL is the first private sector company globally to partner with Green Climate Fund (GCF) to develop a solar rooftop market through a USD 100 million credit line and this term loan and credit line raised by MYSUN forms a part of this GCF Facility.

Being a part of the Paris Agreement, GCF is the world’s largest climate fund mandated to support developing countries raise and realize their Nationally Determined Contributions (NDC) ambitions towards low-emissions, climate-resilient pathways.

“TCCL has an active solar rooftop funding program which aims to mainstream financing in this segment. Our partnership with MYSUN gives us the opportunity to further accelerate India’s energy transition. Rooftop solar represents only 11% of total solar installation in India which is significantly lower than the targeted 40% share and TCCL aims to bridge the gap to decarbonize energy consumption.” said Mr. Manish Chourasia, MD of TCCL.

Fourth Partner Raises $125 Million Equity Funding

Hyderabad based Fourth Partner Energy has raised a fresh funding of $125 million for its expansion plans. The big new investor this time is Norwegian investment fund Norfund, that has invested $100 million. Existing investor the RISE fund has invested a further $25 million. Norfund was last in the news for its backing of Italy’s ENEL for its India plans .

Fourth Partner Energy will use the funds to strengthen its onsite and offsite solar presence in India and key markets across South and Southeast Asia, says the firm. The company has targeted 3 GW of installed solar capacity by 2025, besides and expanding capabilities across energy storage and electric vehicle charging infrastructure. The big funding round should help the firm go full throttle on its expansion plans.

The firm currently has a 550 MW solar portfolio. Operations commenced in Sri Lanka, Bangladesh, and Vietnam recently, while in Indonesia, it has tied up with integrated energy major Indika Energy to offer solar solutions to corporates there.

Besides RISE fund, which had invested $70 million in 2018, Fourth Partner has been ding successful fund raises regularly, the last one being a Rs 250 crore raise from the UK’s CDC.

The latest funding round for Fourth Partner is a welcome addition to market that has been consolidating towards the larger players. Fourth Partners, with its diversified portfolio and solutions for off grid and open access markets, is counting on international opportunities, besides an improving policy environment in India to vindicate the trust of its investors. Hero Electric, the market leader by sales in the electric two wheelers, has raised an investment of Rs. 220 Crore from a UAE-based financial services company Gulf Islamic Investments (GII), and an existing investor, OAKS investment partner. the funds will be deployed as Hero Electric seeks to make an impact in the crowded electric two wheeler segment, where firms like Ola Electric and Ather last week have announced major ramp up plans for 2021-22.

Hero Electric scooter DashThe firm is planning to sell around 1 million e-scooter units every year from now. Speaking of the investment, “This round of investments which is a first of a larger scheme will help expand our manufacturing capacities, increase R&D spends that will enable us to continue to launch innovative products to disrupt the category. Hero is committed to its mission of – No Emission and builds a sustainable electric future” said Naveen Munjal, managing director, Hero Electric.

“Hero Electric is exceptionally wellpositioned to achieve multi-fold growth in the coming years,” states Pankaj Gupta, founding partner and co-CEO of GII. For GII, this investment in Hero Electric through its India Growth Portfolio II is an opportunity to expand its play in the country. “It is an important investment destination in the firm’s global strategy,” Gupta added.

Hero will join other other electric twowheeler makers like Ather Energy, Earth Energy EV, Ola Electric, Komaki, that have been aggressively increasing their manufacturing capacity as well as distribution reach in the country.

Some of the increase has been driven by changes in the incentives for electric vehicles. As the Department of Heavy Industries (DHI) has increased the demand incentives by 50 percent for the electric two-wheeler (E2Ws). Hence, the demand incentives for E2Ws have been increased to Rs 15,000 per kWh from the earlier uniform subsidy of Rs 10,000 per KWh for all EVs and hybrids, except buses. Hero’s MD, Mr. Naveen Mujal has accepted and appreciated the step taken by the DHI as he thinks it will give a better opportunity to the e-scooter makers for expansion and increasing their sales.

If we talk about the number of units sold, in March this year Hero Electric announced that it has sold over 50,000 electric two-wheelers in 2020 consequently retaining the top slot in the segment. The company also announced that its sales network has crossed the 600 touchpoint mark covering 500 towns and cities across the country.

Hero Electric Raises Rs. 220 Crores From GII and OAKS

Andhra Pradesh Announces Financial Assistance for Solar Rooftop Plants

Andhra Pradesh Eastern Power Distribution Corporation Limited (APEPDCL) announced last week that residential customers interested in installing grid-connected rooftop solar (RTS) plants would now be entitled to receive central financial assistance.

The Ministry of New and Renewable Energy (MNRE) has sanctioned 8MW capacity in the residential sector under Phase II of the RTS program for APEPDCL with timelines for completion of allocation capacity in 15 months. That opens a window for potentially 2600 plus residents of the state who own a proper terrace to avail of the scheme, assuming typical size of 3 KW of solar rooftop. V Vijaya Lalita, Chief general manager, Energy Conservation, Energy Audit, Solar/APEPDCL, informed that the facility was extended to Srikakulam, Vizianagaram, Visakhapatnam and both Godavari districts’ residential consumers by installing grid-connected plants in their homes through EPDCL. Empanelment of agencies for Grid Connected Rooftop Solar Photovoltaic power units of capacity 1 KWp to 500 KWp capacities in APEPDCL has already been done. Sixteen agencies are empanelled in 1 KWp to 10 KWp category and three agencies are empanelled in above 10 KWp to 500 KWp category. All has not been well in Andhra Pradesh of late. Renewable energy companies, solar and wind, with Power Purchase Agreements (PPAs) with the state government, have urged the AP high court to expedite the hearing on the batch of petitions filed challenging the single judge order. The companies have told the high court that they have been facing financial troubles and are on the verge of bankruptcy.

The conflict arose after the state government decided to review the power tariffs and a subsequent GO issued in 2019, forming a committee to renegotiate prices with the companies. The state government proposed paying Rs 2.44 per unit instead of Rs 4.8 for solar power as per the initial agreement, which was unacceptable to the companies. In other renewable energy news coming from the state, National Institute of Technology- Andhra Pradesh recently organised a five-day online training in ‘Power Electronics Applications in Smart Grids and Electric Vehicles’. Power electronics is an interdisciplinary area that combines electric drives, power quality in power systems, renewable energy systems, microgrids and electric vehicles.