COVID-19: No impact on operating projects; expect up to Rs 13,000-mn revenue in FY20, says Azure Power
The firm added that they are comfortable with their revenue and operating megawatt guidance for FY20 and FY21
New Delhi: Azure Power Global, a New Delhi-based independent solar power producer, has recently said that their operating projects have not been impacted due to the COVID-19 pandemic.
The New York Stock Exchange-listed firm added that they are comfortable with their revenue and operating megawatt guidance for financial year 2019-20 (FY20) and FY21. For FY20, the revenues are expected to be between Rs 12,900 million to Rs 13,000 million, in line with guidance of Rs 12,770 million to Rs 13,350 million. It added that 1,808 MW was operational.
“Our plants remain fully operational during the recent lockdown in India as electricity generation is designated as an essential service in the country. There have not been any cases of coronavirus reported by our employees as of April 10, 2020,” Azure Power said in a statement announcing its operational and financial updates.
The firm added that it had been receiving payments towards electricity supplied from all their customers in normal course and that there has only been minor curtailment of plants, as of date 10 April 2020.
“There has been significant reduction in electricity demand in India and discoms are reporting delay in payments from their customers. We have received force majeure notices from various discoms stating their inability to perform their obligations under the terms of the PPA due to COVID-19,” the firm said.
The Ministry of New and Renewable Energy (MNRE), however, has directed state discoms to reiterate that all renewable energy facilities in the country have been granted a ‘must-run status’ which remains unchanged during the period of the lockdown. It had also added that any curtailment but for grid safety reasons would amount to deemed generation.
In a letter to all state governments, the power ministry had also said that the obligation to pay for the power within 45 days of the presentation of the period given in the PPA remains the same.
Following the ministries’ directives, the Solar Energy Corporation of India, has denied force majeure claims from various discoms which had cited low demand and delayed payments from their customers due to the pandemic.
On the liquidity front, the company said that their position remains sufficient to continue normal operations through at least the end of FY21, even if only some of the highest debt-rated counterparties such as SECI continue to make payments for electricity received.
“As of date, our unrestricted cash and cash equivalents were about Rs 9,400 million and our accounts receivable balance was about Rs 5,200 million. To further bolster liquidity, we are exploring working capital lines and revolving credit lines with domestic and international financial institutions,” the firm added.
Azure Power’s under-construction plants have stopped activity until the lockdown ends. “Our counterparties for these plants have recognised our force majeure claim and we do not expect to incur any penalty from delays related to COVID-19 for our plants under construction. We do not foresee any increase in our project costs related to COVID-19 as of date,” it said.
However, it added that financing for their 1,290 MW of under-construction projects is on schedule.
The firm said that debt-funding for the 90-MW Assam 1 and 600-MW Rajasthan 6 projects was in place and has also received a commitment from EDC, Societe Generale, and MUFG Bank for the debt-funding of their 300-MW Rajasthan 8 project. It is also in advanced discussions with banks for the debt-funding of another 300-MW Rajasthan 9 project.