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SkyPower to Build Solar Plant in First Indian Project

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SkyPower Global, a Canadian solar-energy developer, won its first project in India to build a 150-megawatt plant in the central state of Madhya Pradesh at the lowest-ever tariff in the country.

Madhya Pradesh had sought bids for 300 megawatts of solar capacity. SkyPower was the lowest bidder, according to a statement from the company.

Hero Future Energies, the highest bidder, won 38 megawatts. The difference in the tariff quoted by HFE in the bid and the lowest tariff, of 5.05 rupees (8 U.S. cents) a kilowatt-hour, is about 0.59 rupees, Hero said.

The tariff quoted by SkyPower was “abnormally low,” according to Hero Chief Executive Officer Sunil Jain. “I was expecting 5.5 rupees and I don’t know how this is viable.”

Analysts at Bloomberg New Energy Finance considered it an exceptionally low bid at current equipment costs.

“One reason could be that they are not hedging fully their foreign exchange risks, as a result of which their cost of funds could reduce to less than a third of local debt costs,” BNEF analyst Bharat Bhushan Agrawal said.

SkyPower’s offices in India had no immediate comments.

In addition to SkyPower and Hero Future, ReNew Power Ventures Pvt, one of the leading clean-energy companies in India, won 51 megawatts in Madhya Pradesh at the second-highest tariff of 5.63 rupees a kilowatt-hour.

India plans to increase solar installations to 100 gigawatts by 2022 from 4 gigawatts at present.

(Updates with comments from fourth paragraph.)
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