- Developer has 1,060MW of unbuilt solar projects in India: BNEF
- Portfolio may be worth hundreds of millions of dollars: BNEF
SunEdison Inc., the U.S. company credited with bringing solar tariffs in India down to record lows in November, is seeking to sell as much as 1 gigawatt of unfinished projects in the Asian nation as it teeters on the verge of bankruptcy protection, say people familiar with the matter.
The world’s largest renewable-energy company has spoken to several potential buyers, according to the people approached about making a purchase, who asked not to be named because the discussions are confidential.
The talks may reflect SunEdison’s drive to raise cash and steady its finances as it faces potential technical default on at least $1.4 billion in loans. The company has twice delayed the release of its annual report detailing its financial position.
SunEdison is seeking equity investors for its projects, which is in step with its strategy for developing the assets, Pashupathy Gopalan, SunEdison’s president in the Asia-Pacific region, said in an e-mailed response to questions. He declined to say whether it will sell its interests.
“As a business model, we continue to pursue equity partnerships in our projects to the extent allowed by the power-purchase agreements,” Gopalan said in the e-mail, adding that almost 500 megawatts of Indian projects are funded and under construction.
The company is working on seven solar projects with a total capacity of 1,060 megawatts in India and has a further 168.9 megawatts of photovoltaic plants either fully or partly commissioned, according to Bloomberg New Energy Finance. The London-based researcher said photovoltaics in India cost about $900,000 per megawatt to develop, suggesting the whole portfolio may be valued at as much as $1.1 billion when complete.
India’s solar market, encouraged by incentives from Prime Minister Narendra Modi’s government, is struggling to finance all the projects its developers are planning. India had 5.25 gigawatts of installed solar capacity as of the end of January, according to data on the Ministry of New and Renewable Energy’s website, and is targeting 100 gigawatts by 2022. A gigawatt is 1,000 megawatts.
“Nearly 2.5 gigawatts of clean energy projects are looking for final owners in India,” said Sumant Sinha, founder of clean energy firm ReNew Power Ventures Pvt., which is backed by Goldman Sachs Group Inc. Sinha said he’s in the market to buy assets as long as the price is reasonable. The SunEdison assets on offer are included in that total, he said.
Before its financial troubles mounted, SunEdison shook up India’s solar market by winning bids at government auctions. The company, based in Maryland Heights, Missouri, took all 500 megawatts of capacity offered in a November auction in the southern state of Andhra Pradesh. It offered to sell power at 4.63 rupees (7 cents) a kilowatt-hour, a record low for an Indian solar auction at the time.
"It’s unlikely for SunEdison to realize a significant premium on the India portfolio," said Rahul Goswami, managing director at clean energy investment bank Greenstone Energy Advisors, which is handling some of the transactions involving renewable capacity.
Some competitors say SunEdison bid so low that it can’t profit from the projects it has planned and will have trouble selling the assets as a result.
“There is no money to be made on such low tariffs,” said Sunil Jain, chief executive officer of Hero Future Energies Pvt., the clean energy arm of Hero Group, which is the parent of India’s biggest motorcycle maker.