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SunEdison to sell India projects, hires Rothschild to run sale process

17 June, 2016

SunEdison Inc. has put its entire portfolio of 1,318 megawatt (MW) in India for sale with Rothschild (India), a financial advisory group, running the sales process termed Project Joule.

Rothschild has called for interested buyers to submit term sheets for an indicative offer for the eight projects of the US-based renewable energy firm which has filed for bankruptcy protection.

According to documents reviewed by InfraCircle, Rothschild has invited offers from companies with the last date for proposal being 17 June. Apart from the offer price and the premium, the proposal also calls for an outline for the future strategy for the platform in terms of organic development and acquisition strategy.

The move comes in the backdrop of a consolidation in the renewable energy sector. In the largest deal in the country so far, Tata Power Co. Ltd signed an agreement to buy the renewable energy business of Welspun Group for Rs9,249 crore including debt.

The equity requirement for these eight projects is around Rs2,010.2 crore, of which Rs108.2 crore has already been infused by SunEdison. There is an immediate requirement for Rs553 crore of equity infusion in these projects located in states such as Telangana, Andhra Pradesh, Karnataka and Jharkhand.

“Around six companies have been invited by Rothschild to participate in the sale process,” said a person aware of the development requesting anonymity.

SunEdison Inc. became one of the most competitive bidders for developing Indian solar power projects by quoting a tariff of Rs4.63 kilowatt per hour (kWh) in November 2015 for a National Solar Mission tender for 500MW in Andhra Pradesh.

While queries emailed to the spokesperson of SunEdison on 16 and 17 June remained unanswered, a Rothschild spokesperson declined to comment.

It currently costs between Rs4-5 crore per MW to set up a solar power project. According to the government, around Rs71,201 crore has already been sanctioned to finance green projects.

Experts said that the move is an indication that only serious companies will now work in the growing Indian clean energy sector.

“Some of the companies such as SunEdison have been aggressive across the world in acquiring projects. But recent mergers and acquisitions in the renewable energy sector in India is good for the segment as now only serious firms with the ability to bid and the resources to back up tariff would be in the field,” said P. Uma Shankar, former power secretary.

The solar power tariffs have been declining in India from the high of Rs17.91 per unit in 2011. In January 2016, Fortum Finnsurya Energy Pvt. Ltd, a Finland-headquartered utility, quoted a record low of Rs4.34kWh to get the mandate to develop a 70MW solar plant under NTPC Ltd’s Bhadla Solar Park tender in Rajasthan.

The Narendra Modi-led government has set a target of adding 175 gigawatt (GW) of renewable energy projects across the country by 2022. Of this, 100GW is expected to be in the solar power domain and 60GW in wind power. India has an installed capacity of 26.8GW of wind and 7.6GW of solar power.

The country has attracted investor interest both from India an abroad and has been at the forefront of the government’s initiatives to cut down its emission by 2030 in order to abide by its commitments at the Paris Climate Change Conference.

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SunEdison to sell India projects, hires Rothschild to run sale process

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