ENERGY SECURITY & SUSTAINABLE SOLAR POWER · Favorable FDI Policy – 100% under automatic route...
Transcript of ENERGY SECURITY & SUSTAINABLE SOLAR POWER · Favorable FDI Policy – 100% under automatic route...
SANTOSH KUMAR SAHU DIRECTOR (Finance) OHPC
CONCEPT VISUALIZED BY
ENERGY SECURITY & SUSTAINABLE SOLAR POWER
Santosh Kumar Sahu Director (Finance), OHPC Ltd.
Solar Radiation over India
What can be done to put Electricity
Distribution Sector on a fiscally
sustainable path and bring
investment in distribution, to provide
Energy security with intense of
political pressure to supply
quality power cheaply and provision
of access of Electricity to all ?
Answer
Engineered Finance and Finance
Engineering to be done for Cheaper
and Quality Power
SILICON
S - Solar
I - Incredible
L - Laboratory
I - Indian
C - Cost
O - Operational
N – Nominal
(Incredible Indian Solar Laboratory with Nominal Operational Cost)
(C) SOLAR
PRICING OF SOLAR
Selecting Right Site with higher CUF for Solar
Development of Mega Solar Park with Evacuation
Selecting the Right Technology, Module and
Cell and other Equipment like Inverter,
Transformer etc.
Use of Balance unused land of existing Factories, Dam Sites,
Institutions, Railway, Airport etc
Manufacturing of Mega PV Modules for use of floating Solar
Panel in the Reservoir. R&D from Silicon to Electricity.
Capacity Building of Professional Maintenance Contractor
Use of Roof Top Solar
Regulation for Net Metering arrangement in
Roof Top Solar
Land Identification of Non-Agricultural/ Non-Forest Land
Lease hold Land for 25 Years
Un-Used Land of Factory/ Airport/Railway/Institution
Depleted Mines
Ownership / JV with Land Owner / Rooftop
Sourcing of Finance 75% investment from India
25% from Outsource/ FDI/ECB
Public Financing
Pension/ Gratuity Fund
Debt /Equity
Equity Capital Investment
NCEF Utilization/ Coal Cess
International Bond Market
Tax Free Bond 54 EC/ Infrastructure Bond
Subsidy
Capital Subsidy
Revenue Subsidy
GBI
VGF
Financing Issues
Bankable DPR
Standard Bidding Documents
Buyer ? Long Term PPAs
Declaration of Renewable as Priority Sector like Agriculture
Revision of Banking Sectoral Cap
RBI Approval for Re-Engineering of Power Sector Cap
Long Term Loan – Tenure of Loan 20 years
Risk Management through Insurance
Collateral Security
Servicing of Bonds
Re-Payment of Loans
Concessional Interest / Reduction in Cost of Financing
Securitization/ Solar On lease (USA)
Project Finance Lease (Japan)
Guarantee Mechanism / BG/FIG/CG/Comfort Letter
Comfort Mechanism
Other Issues
Green Corridor and maintenance of the same
Bundling of Dirty Power with Clean Power
Energy Security
Payment Mechanism / TRA/Escrow
Collaborative Efforts
Consistency / Commitment of Regulator
Use of National Clean Fund to balance Hedging Cost
Guarantee of Module, Inverter, Transformer and Cell
Insurance during O&M Period
Open Access/Wheeling Charge
Logistic/ Rail
Scheduling/Deviation mechanism
Capacity Building for O&M
Support from Govt
Renewable Policy
Incentive Policy of Govt.
Allocation of Land
Signing of PPAs
Acceptance of Feed in Tariff for a fixed period/
Bid Price
Appointment of Task Force
Savings for Country
Saving Of Subsidy in Kerosene
Enhancement of GDP by using Solar Pumps
CONCERNS
Enforcement of RPO/RGO
Enforcement for purchase of REC.
Who is to buy?
Continuation of Income Tax Relief.
Exemption from Clearances and easy doing Business
Green Corridor and its Allocation of Maint. Cost
Uniform Pricing
Source of Debt (70%) to be collected from Tax saving Infra Structure
Bond (7.5%) ( i,.e Investor can invest at 7.5% Tax free Bond) = 11.34%
0.5% Charges to Funding Agency like IREDA
Working Capital Interest rate at 0.5% over TDR
Charging of Up front fees to Borrower to balance the Arranger Cost
Pool Borrowing by IREDA from Foreign Agency
CONCERNS
Favorable FDI Policy – 100% under automatic route
Home Loans to include Roof Top Solar
Continuance of Accelerated Depreciation
CUSTOM DUTY / EXCISE/ VAT Exemptions
Advise to RBI for simpler Hedging formulae to take care the FERV.
Any Shortfall / Excess in Hedging and FERV to Budget Provision.
Enhancement of Domestic Manufacturing
Project Life Cycle Cost is yet to be Established.
Funding Option
Debt Instruments
NBFCs
Commercial Banks
ECB
Exim Bank Finance
Suppliers Credit
Construction Finance
Re-Finance
Lease Financing
Equity
Pvt Equity
Venture Capital
RE Challenges
High Cost Debts
Low Availability Of Debt
Low Familiarity of Banks in RE Sector
Restriction in Foreign Borrowings
Under Developed Bond Market
Risk in Equity
Grid Parity
Weak Discoms
Inconsistency in Regulation
Sensitive Analysis of Solar Cost in India
Size Of plant (MW) Debt : Equity
Post Tax RoE %
Interest Rate %
Depreciation %
O&M (Lakh/MW upto 10 year with Esc-
6% from 11th year)
Interest Rate on WC %
Capacity Utilisation Factor (%)
Capital Cost
/Cr/MW Tariff /Rs /
kWh
20 70:30 15 11 4.5 7 9 18 7 6.43
20 70:30 16 11 4.5 7 9 18 7 6.56
20 70:30 15 12 4.5 7 9 18 7 6.58
20 70 :30 15 11 5.83 7 9 18 7 6.62
20 70:30 15 11 4.5 8 9 18 7 6.50
20 70:30 15 11 4.5 7 8 18 7 6.41
20 70:30 15 11 4.5 7 9 19 7 6.09
20 70 :30 15 11 4.5 7 9 18 8 7.26
20 70 :30 15 11 4.5 7 9 17 7 6.79
20 70 :30 15 11 4.5 7 9 20 7 5.79
20 75 :25 20 8 4.5 7 9 17 7 7.17
20 75 :25 20 8 4.5 7 9 20 7 6.11
APPOINTMENT OF REGULATOR FOR LENDING AGENCY IN
POWER SECTOR
Regulation for Lending Agencies
for fixation of margin like trading
of Power being 70% of Capital is
invested by them in the project.
Relaxation in Allowing Generation, Transmission & Wire Business to
avail External Commercial Borrowing and FDI
Arrangement of Inter Ministry meeting for liberalization of Hedging
in case of Foreign Borrowings or Foreign Contracts
Allowing cheaper FIG (Financial Institution Guarantee) instead of
Bank Guarantee (BG)
PROPOSED REGULATOR FOR
LENDING AGENCY
ENDLESS ENERGY NEVER END