Bankers and experts were speaking during a panel-discussion at the second edition of RE-Invest India.
Leading bankers and renewable energy financing experts from multilateral agencies have pointed out that low solar tariffs quoted in reverse auctions should be done after comprehensive assessment to maintain the long-term viability of power generation projects. Bankers and experts were speaking during a panel-discussion at the second edition of RE-Invest India. The panel had representation from financers such as Power Finance Corporation (PFC), Rural Electrification Corporation (REC), Indian Renewable Energy Development Agency (IREDA), Yes Bank, World Bank and the International Energy Agency.
Ajeet Kumar Agarwal, director-finance, REC, said tariffs should be sustainable to enable debt servicing. While it is true that solar module prices are coming down, the devaluation of the rupee should also be kept in mind, he said. The latest reverse auction for 500 MW capacity of solar power in Gujarat discovered tariff of Rs 2.44/unit, matching the lowest-ever rate in the country for the fourth time after it was first found in May 2017 for Rajasthan’s Bhadla projects.
Agarwal said low tariffs are subject to global money market volatility levels, land availability and transmission access, and such factors should be kept in mind while bidding aggressively. Chinmoy Gangopadhyay, director-projects, PFC, said long-term funding dynamics get complicated with promoters trying to move out in a few years. “We are trying to look at solar energy projects from the angle of their long-term viability.” KS Popli, CMD of Ireda, echoing similar sentiments, said, “Low rates without due diligence can lead to risks.”