Canada’s SkyPower Global in Talks to Sell Stake in MP Project

The Economic Times - - Companies - Kaavya.Chan­drasekaran @times­group.com

New Delhi: Canada-based so­lar power de­vel­oper SkyPower Global, which won con­tracts to set up plants of 150 MW in Mad­hya Pradesh last July, is look­ing to off­load equity in the project and may sub­se­quently exit, in­dus­try ex­ec­u­tives and an­a­lysts said. The com­pany has ap­proached at least two lead­ing In­dian re­new­able energy de­vel­op­ers, seek­ing in­vest­ment in the project.

SkyPower Global’s Mau­ri­tian arm, SkyPower South East Asia Hold­ing Ltd, won con­tracts to set up three so­lar plants in MP of 50 MW each at tar­iffs of .₹ 5.05, .₹ 5.11 and .₹ 5.30 per kwH in July 2015. In a year of tum­bling so­lar prices, the tar­iffs still made a splash as they were record lows at the time. “I was al­ways ap­pre­hen­sive about this bid in MP,” said a se­nior of­fi­cial, as­so­ci­ated with the min­istry of new and re­new­able energy. “The at­ti­tude and ac­tions of SkyPower also never seemed to sug­gest it was se­ri­ous. Usu­ally, com­pa­nies visit the site be­fore bid­ding and do plenty of prepara­tory work, which seemed to be miss­ing in this case.”

SkyPower is the sec­ond so­lar de­vel­oper try­ing to shed equity in a project it won amid much fan­fare. Even be­fore its cur­rent bank­ruptcy threat, since lateFe­bru­ary this year, SunEdi­son has been look­ing for equity in­vestors in its 500 MW so­lar project in Andhra Pradesh, which it won quot­ing a tar­iff of .₹ 4.63 per kwH last Novem­ber, which was again a his­toric low at the time. Rules per­mit so­lar de­vel­op­ers to sell up to 49% of their stake in a project, but they can exit only one year af­ter the com­mis­sion­ing of the project.

Manu Shri­vas­tava, prin­ci­pal sec­re­tary — New and Re­new­able Energy, in the MP gov­ern­ment, said he was un­aware of any prob­lem with Skypower. “They have signed the PPAs (power pur­chase agree­ments) and given the req­ui­site bank guar­an­tees,” he said. An email query to SkyPower did not elicit any re­ply. The MP gov­ern­ment had floated ten­ders for a to­tal of 312 MW of so­lar power projects. Against SkyPower’s .₹ 5.05-5.30 per kwH, the next low­est bid was .₹ 5.38 per kwH made by Atha Group, which won 30 MW. Re­New Power quot­ing a tar­iff of .₹ 5.63 per kwH was awarded 51 MW, while Hero Fu­ture En­er­gies pitched at .₹ 5.64 per kwH and won 50 MW.

Un­like most oth­ers, SkyPower did not even seek vi­a­bil­ity gap fund­ing (VGF).

How­ever, it is now look­ing for buy­ers. “The com­pany has ar­ranged in­ter­me­di­aries for the sale,” said an in­dus­try source. “It is seek­ing a pre­mium since tar­iffs are now lower than what it had quoted.” The MP projects were SkyPower’s first in In­dia. It has since won another 200 MW so­lar project in Te­lan­gana.

SkyPower Global is the sec­ond so­lar de­vel­oper try­ing to shed equity in a project it won amid much fan­fare

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