Avaada to raise funds for projects in 8 countries
Vineet Mittal’s Avaada group plans to raise dollar-denominated bonds for its solar energy business abroad. The entity is looking at eight countries, including Vietnam and some in Africa.
Deals for two of these are likely to be signed as part of the International Solar Alliance next month, Mittal told Business Standard. Due to a confidentiality clause, he did not name the African countries but said the projects would be off-grid and mini-grid. “There is a huge opportunity, provided we can understand the regulatory risks and cover it with a risk mitigation plan,” said Mittal.
The company would be taking an insurance wrapper for its bond issue. In 2016, Welspun Renewable Energy, cofounded by Mittal and B K Goenka, sold its renewable energy (RE) business to Tata Power Renewable Energy for ~92.49 billion. Mittal has now embarked upon expansion of RE capacity under Avaada. Beside, the EPC (engineering, procurement, construction) business ofWelspun Energy was demerged and is now vested with Avaada Power. Project development and management activities for RE are done through Avaada Energy.
The company would be completing 1,000 Mw in photo-voltaic solar projects by December 2018 and plans to raise ~2.5 billion over the next four years. “We will go into solar, wind, EPC, and rooftop; we are going aggressively into the rooftop segment. We are also going into energy solutions,” said Mittal.
Avaada says it is looking at 5,000 Mw in solar and wind energy, in India and abroad. “Wind will be less than 20 per cent of this,” he said. Last week, Avaada Power signed an agreement with the Uttar Pradesh government to invest ~100 billion in developing 1,600 Mw of solar projects in Mirzapur, Badaun, Gorakhpur and Bundelkhand.
The company also has seven wind power locations for which it has MoUs but it did not take part in the recently concluded wind power generations because of aggressive nature of bids. “There is huge opportunity in India and no need for cut-throat competition,” said Mittal. He said there should be no trade barriers in the RE sector; these could be counter-productive. Instead, the government should promote manufacturing through production-based and job incentives. “When local manufacturing picks up, the forex risk will come down. You will leapfrog.”
Last month, the directorate-general of safeguards had recommended 70 per cent duty on solar power cells, whether or not assembled in modules or panels, from China and Malaysia. A report from ratings agency CRISIL says this could put in trouble about 3 Gw of capacity, involving investment of ~120 billion.