1. ‘Risk’ assessment in Solar
28th Jul 2016

2. Low tariff Solar PPAs… Financers view low tariff ?? Developers view
Which side are you ?
And what is
low tariff ??

3. Permitting and approvals
Its not one factor that decides a ‘sustainable tariff’ but a plethora of things together..
Module Wattage
Project Structuring
Revenue Payment Cycle
IDC
Module Quality
Execution delays
RoW
Debt tenure
O&M Cost Escalation
Interest Rate
Overloading
Leverage
Seasonal?
Structures
Turnkey
Insurance
O&M Schedule
O&M Cost
Permitting and approvals
Module sorting
Cost Escalation
Pitch
Plant design
Fixed?
Forex rate
GRID Availability
Transformer
Monitoring
Contour
Tracker?
Land
Cleaning Frequency
Degradation
Plant Availability
Repayment Profile
Module Cost
Tariff?
DSRA
Cable length
Plant configuration
Financing Cost
Invertor
Module Testing
Running cost
EPC Cost
Scheduling

4. Tariff with Target IRR of 16.0%
Tariff vs returns ?
Tariff with Target IRR of 16.0%
Interest rate decreases by 0.5%
Module cost decreases by 1 USD cent
Leverage increases by 5%
PLF increases by 0.5%
EPC Price decreases by 5%
At a certain base set of assumptions
O&M cost decreases by 0.25 Lakh/MWp
Debt Tenure increases by 2 years
Tariff
(in
INR/unit)
5.25
5.19
Tariff for target IRR changes by drastically based on how the asset is managed
5.13
5.00
4.93
4.88
4.77
4.75
Base case assumptions
Module cost decreases by 1 USD cent
EPC Price decreases by 5%
PLF increases by 0.5%
Debt Tenure increases by 2 years
Leverage increases by 5%
Interest rate decreases by 0.5%
O&M decreases by 0.25 Lakh/MWp

5. Because it’s the not about MWs installed
If these plethora of factors are successfully managed then ‘risk profile’ of a plant is low
Because it’s the not about MWs installed
It is about MWhr (units) generated
It’s the plant that makes the money and not the ‘portfolio’

6. SolarArise – Solar PV Asset management firm Own & operate projects for long term
Majority ownership for long term holds …
A highly value-creating Indian solar asset investment vehicle with steady annuity returns
Own majority (51%-100%) in solar SPV projects
Repatriate cash back each yr
… across a diversified portfolio …
Invest in projects ranging from greenfield projects to commissioned projects
Diversified across government vs. private;
Manage operations of the SPVs with full control
Core Infrastructure India Fund Pte Ltd (CIIF), managed by Kotak Mahindra Group
GEEREF, a fund of funds advised by European Investment Bank Group (EIB)
… to deploy >2000 Rs Cr. In short term in partnership with developers / EPC players
Looking to build a 250 MW portfolio over the next year
Work with Developers, EPC players, land owners, power purchasers etc
… backed by global infrastructure
funds

7. Thank You