SB Energy on track to achieve solar energy target in India: Raman Nanda, CEO, SB Energy Global
The real target for companies with long-term vision to be a global leader would be to build 100 GW. Within the next 10 years, we will see 100 GW companies in renewables or even in just solar. We are prepared to be one of them. India maybe contribute to half of that capacity, said Nanda in the interview with ET.
SoftBank’s arm SB Energy Global will meet the target of setting up 20 GW of capacity in the next five years in India despite challenges, Raman Nanda, CEO, SB Energy Global, told Rachita Prasad. The next target would be to become a global 100 gigawatt-company. Edited Excerpts:
SoftBank committed to invest $20 billion to set up 20 gigawatts in India. How has the journey been so far. Is that target achievable given the challenges?
In 2015 Masayoshi Son, along with Sunil Mittal, made a commitment that we would do 20 GW. Today, we are a little over 5.5 GW. We have built a strong team. We won and executed large-scale solar projects which helped us create a robust playbook for building a big solar plant — right from the auction stage to the commercial operations. We entered the industry when building scale was possible. We have done construction on time and met budgets. Our investors are satisfied with our financial results. This is a young industry that’s changing fast. Before we entered India, solar tariff was over Rs 6; we won our first auction at Rs 4.60, and now it’s a little more than half of it. With such rapid change, such hungry demand for land, there’s a lot of challenges for an industry that moves that fast. With our great team and the resilient playbook, we are on track to execute 20 GW in the next five years.
What’s the way ahead and next target for SB Energy?
The real target for companies with long-term vision to be a global leader would be to build 100 GW. Within the next 10 years, we will see 100 GW companies in renewables or even in just solar. We are prepared to be one of them. India maybe contribute to half of that capacity.
Solar power tariff has fallen and many renewable power generators are facing delay in payments from discoms. What is the motivation for somebody trying to expand in the renewable space?
Our contracts are 100% with the central government, or central government entities. We have not faced much payment delay problems. We walk in with open eyes. There is still a lot of pressure on bidding.
We have a clear set of rules on equity return, operating income. We don’t bid where it doesn’t make sense.
Are you looking at divesting a part of your majority stake in SB Energy? Or is there a possibility of inducting another investor?
There are no plans to divest. We have got results; we have a playbook and we are still bullish on solar. We are looking at other countries where we can do big-scale solar projects. We have just entered the US. We couldn’t be in a stronger place, so there are no plans of divestment. We don’t plan to get another investor. We have taken years to create the dynamics between our investors and the platform; it’s a special dynamic; why change it?
Any plans for fundraising?
We are fully funded.
There are concerns that a lot of SoftBank’s recent investments have played out as expected and they would have an impact on investment strategy of SB Energy. Are you cautious?
We have a strong platform and understand the business. We have a plan to achieve our goal and that’s what drives our goals. The results have been what we had hoped for. We continue with our plan.
Are you looking at expanding the wind energy portfolio?
We are doing a large-scale solarwind hybrid project. We are putting our foot into wind as well.
Are you looking at acquisition opportunities in renewables?
We are open to the idea but it comes down to the rules we have set for ourselves. The price has to be right.
What is your assessment of government policy on renewable?
The government is doing the right thing. We only would want that that more of the solar parks should come because they have succeeded in setting up scale.