P-op

L&T Infra Finance Initiative

June 2020

Team InfraEye
Nisheeth Khare | Kapil Edke | Nishank Agrawal | Shreetama Choudhary | Nikhil Hardikar
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From The Chief Executive’s Desk

Dear Colleagues,

As India embarks on the road of UNLOCK-1, the Government seeks to meet the twin objectives of saving lives and
reviving livelihood. Key economic indicators such as unemployment, vehicle registration data, retail electronic
transactions and refinery utilisation levels are showing visible improvement. The infrastructure space is also
witnessing a similar trend. As restrictions on intra-state and inter-state movement of traffic are being lifted, toll
revenues have also bounced back to 70-75% of their pre-COVID levels. In the power sector too, the electricity
demand has picked up after witnessing y-o-y fall by more than 22% in April 2020, and the gap with the previous
year has nearly halved. While India stares at a long road to economic revival and normalcy will take some time,
these positive developments indicate that the infrastructure story of India is capable of progressing even when the
path is arduous. Sectors and companies which emerge victorious from this period would have weathered conditions
which cannot be factored in any stress scenario.

Last month, the Government of India announced ‘Atmanirbhar Bharat’, an economic relief package of Rs. 20 lakh
crore to boost the Indian economy. While the jury is still out on the effectiveness of the relief majors, the underlying
intent of the programme to make India self-reliant is commendable. While India has demonstrated its capability in
the past towards achieving self-reliance e.g. in food grains through Green Revolution and in milk production through
White Revolution, the key to the successful execution of the relief package would be in the right adoption of fiscal
and regulatory policy mix.

For infrastructure sectors, it means implementation of fiscal package of Rs. 90,000 crore already announced for
improving health of power discoms and formulating a similar plan for road development corporations and other
relevant authorities. On the regulatory front, the infrastructure sector is expecting better investment environment
through easier project land availability, swifter regulatory approvals and strict adherence to project contracts by
counterparties.

The Government of India has decided to suspend fresh initiation of corporate insolvency proceedings under IBC
for at least six months. While the decision is expected to insulate the businesses impacted by COVID-19, experts
are debating on the necessity of alternate resolution mechanism such as debt restructuring under the Companies
Act or a ‘prepackaged deal’ in line with the laws in US/UK to arrive at mutually agreed resolution. A system which
provides relief to genuine borrowers while protecting the interests of the lenders is the need of the hour.

In this issue of InfraEye, we have analysed wind-solar hybrid power projects, which we believe is an important step
undertaken by the government in moving towards 24/7 availability of renewable power. We also have a column by
Mr. Rajat Gupta of Sprng Energy, wherein he has expressed his views about measures required to support the
infrastructure sector. We believe that co-ordinated effort of all stakeholders involved in the infrastructure space is
essential to tide over the crisis.

We hope you will like reading this as much as we have enjoyed in writing it. We welcome your views and
constructive feedback.

Sincerely

Raju Dodti
Chief Executive – Infrastructure Finance

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Expert Speaks

Infrastructure Sector Needs Extraordinary Support to Manage COVID-19 Crisis

COVID-19 has adversely impacted the lives and livelihood of people across the globe at an unprecedented level.
It has claimed more than 4 lakh lives and infected around 70 lakh people worldwide. The government authorities
around the world imposed strict lockdown to contain further spread of the deadly virus, which resulted in economic
activities virtually coming to a standstill. India’s economic growth for FY 2021 is estimated to be anywhere between
0-2%, while some experts are even predicting a contraction in the GDP.

Infrastructure being a capital-intensive industry with higher leverage in comparison to the other industries is facing
liquidity crisis. The liquidity situation may further worsen in the absence of timely support to the sector. Due to
leveraged nature of the sector and dependence on monthly revenues to meet operational expenses and debt
servicing, any material disruption in operations or significant delay in receipt of revenues may pose challenges to
meet their obligations.

In these challenging circumstances, the infrastructure sector needs a holistic action plan and its immediate
implementation from all stakeholders. The below measures, if implemented in a timebound manner, could ease the
issues faced by the sector:

a) Extending financial support to counterparties: The government should immediately extend financial support to
counterparties across sub-sectors to minimise delays in payments by counterparties to infrastructure companies.
As part of the stimulus package, Government of India has announced liquidity plan of Rs. 90,000 crore to discoms
for clearing dues of the generating companies. However, timely implementation of the same would be crucial.
b) Holistic approach by banks/FIs in extending moratorium: Banks and FIs have already provided much needed
support by granting moratorium on payment of interest and principal instalments on loans as per RBI directives.
However, it is important to structure the payment of dues post moratorium so as to match them with cash flows.
c) Support for under construction projects: The project authorities should provide automatic extension of project
completion timelines for the delays caused due to COVID-19 pandemic. Many under-construction projects are
expected to hit a roadblock due to funding issues, labour availability, material movement etc. COVID-19 is expected
to adversely impact the financial condition of promoters and their funding plans. The government authorities, banks
and FIs may consider supporting the projects which are at an advanced stage. Also, banks need to be proactive in
disbursements for genuine cases to avoid delays in project completion.
d) Support for various parties in value chain: Various equipment suppliers, EPC contractors and O&M contractors
may find it difficult to sail through these challenging conditions in the absence of temporary fiscal relief. The
government authorities, banks and FIs need to ensure that these parties get the required support in a timely manner
till the situation improves.
e) Resolution of regulatory issues: The renewable energy sector has seen several rounds of litigation with respect
to validity of PPAs affecting investor interest in projects with state discoms as counterparties. The sector has also
faced inordinate delays in tariff adoption by discoms and regulatory commissions delaying fresh capacity addition
and capex. Many developers have cancelled their bids due to these delays. It is necessary to resolve such issues
expeditiously for promoting fresh equity investments as well as enabling refinancing of viable operating projects.

As our Hon’ble Prime Minister has said, “Difficult time is not a stop sign, it provides opportunities”. This pandemic
has given an opportunity to our country to become self-reliant and infrastructure sector has a key role to play in
making India self-reliant.

Rajat Gupta
Chief Financial Officer
Sprng Energy Pvt Ltd

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Sector Analysis – Wind-Solar Hybrid Power projects
➢ Background – Renewable Energy
✓ As on March 31, 2020, Renewable Energy
(RE) in India constitutes 23% (around 87 GW)
of the total installed capacity but only 10% of
the total energy generation. Because of the
limited contribution, Government of India aims
to increase the total installed capacity of RE to
175 GW by 2022. Year-on-year RE installed
capacity is depicted below:
Capacity in GW
78
69
57
39
46
35
2014 2015 2016 2017 2018 2019
Source: CEA, MNRE
✓ RE being predominantly dependent on natural
resources like sun and wind has inherent
problems which limit its potential to be
harnessed to the fullest. This often results in
unstable outputs and mismatch between
energy generation and demand.
✓ A study was conducted by Ministry of Power to
map all India load vis a vis solar generation.
Based on the study it can be derived that the
net load (total demand minus RE generation)
decreases during afternoon, however steep
ramp-up of generation is required to meet the
demand during the evening hours:
(Source: Report of the Technical Committee on large scale
integration of RE, Ministry of Power)
✓ Thus, the requirement of net load in the
evening must be met with other sources.
✓ Integrating RE plants with conventional
thermal power plants is challenging given that
thermal power plants are relatively less flexible
and have a relatively low ramp-up/ ramp-down
rate. To address these challenges, one of the
initiatives taken by the government is
introduction of hybrid wind-solar power
projects to harness the potential of RE.
➢ Key features of hybrid power projects
In a wind-solar hybrid power system, the Wind
Turbine Generators (WTGs) and solar PV systems
are configured to operate at the same point of grid
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connection. This combination helps to produce
consistent output by stabilizing fluctuations. Some
of the key features of wind-solar hybrid power
projects are as under:
2020 ✓ Integration: Wind and solar power plants can
be integrated depending on the technology
type. In case of fixed speed WTGs, integration
can be done at the AC output, whereas in case
of variable speed WTGs, integration can be
done at the DC output of AC-DC-AC converter.
✓ Size of project: The combination of wind
capacity and solar capacity in the hybrid plant
will depend on the wind power density and
solar irradiation at the location under
consideration.
✓ Cost saving: Hybrid power project can help in
cost saving due to sharing of grid
infrastructure, manpower and maintenance
services. Most importantly, wind-solar hybrid
power projects may lead to efficient land use.
While the solar panels are ground mounted
and require significant acreage of land, the
WTGs require only land equivalent to the
footprint of the tower.
✓ Storage facilities: Hybrid projects coupled with
storage facilities would reduce variability of
output to ensure availability of firm power for a
stable period.
➢ Conducive regulatory environment
MNRE with an objective to promote large grid
connected wind-solar hybrid power systems in
India, released the national wind-solar hybrid policy
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in May 2018; excerpts of the policy are as follows: leading to undersubscription for both the
tranche. Recently, SECI has issued RfS for
✓ A wind-solar plant will be recognized as hybrid 1.2 GW ISTS wind-solar hybrid power projects
plant if the rated power capacity of one under Tranche III. The ceiling tariff for Tranche
resource is at least 25% of the rated power III was Rs. 2.88/kWh, but was subsequently
capacity of the other resource. removed based on developer’s response.
✓ The hybrid power harnessed may be used for:
• captive purpose ➢ L&T's views on Hybrid power projects
• sale to third party through open access
• sale to the discoms at feed-in tariff or at Some of the key factors which shall determine the
tariff discovered through transparent future of said model are mentioned below:
competitive bidding process
• sale to the distribution companies at ✓ Site selection will be critical: Irradiation which
APPC and avail RECs is a key factor in determining the solar
• fulfilment of solar and non-solar RPO generation potential for site when compared
✓ Hybrid power should be procured by the across states shows variance. However, the
government entities through transparent variance can be extremely high across the
bidding process, considering parameters like same locations/states in case of wind because
tariff, capacity utilization factor etc. of different wind profiles, geographical
✓ The policy also allows hybridization of existing contours and other technical factors. To
wind/solar PV plants. identify an ideal site which optimizes total
✓ To smoothen the wind-solar hybrid power generation can be challenging.
output, the policy allows usage of appropriate ✓ Resource estimation will be key task: The
capacity of storage. Bidding parameters for rationale for a hybrid project is to combine
hybrid plants with storage facilities may generation from WTGs and solar PV systems
include firm power output throughout the day, in order to produce consistent output. While
extent of variability allowed in output power, individual resource estimation of solar and
tariff etc. wind is a fairly standard process, in a hybrid
scenario this will be a sophisticated task.
➢ Hybrid power projects - past awards Generally, daily average generation is
considered but in the hybrid model hourly
✓ The extract of the recent bids in hybrid power average generation may come into play.
projects is tabulated below: Predicting which resource will generate how
much in a combined generation set up may
Capacity
Tariff require specialized software tools and
Name Scheme Date Awarded
(Rs.)
(MW) tweaking of standard key assumptions.
Adani
SECI 1.2 ✓ Selective appetite may be a challenge: Market
Green 390 2.69
Energy
GW ISTS Jun may show a selective appetite towards hybrid
Hybrid 2018 power projects because in the current
SB
Tranche I 450 2.67
Energy scenario other than the established players of
Adani
SECI 1.2 Indian RE market, the mid segment RE
GW ISTS Mar players are operating on either wind or solar
Green 600 2.69
Hybrid 2019
Energy platforms but not on both. Whether this
Tranche II
Adani Adani
scheme will be considered as a cross over
Sep opportunity by such players is yet to be seen.
Green Electricity 700 3.24
2019
Energy Mumbai
Total 2,140
Source: MERCOM
Mansi Korgaonkar
✓ The hybrid power Tranche I and II tenders Amit Ramnani
awarded by SECI had a ceiling tariff of Rs. Infrastructure Finance Group - Mumbai
2.70/ kWh, which bidders felt was aggressive,

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Sector Updates – Power & Renewable Energy
➢ India’s wind and solar power capacity addition
falls by 65% during Q4 FY2020
✓ According to clean energy consultancy firm
Bridge to India, India added about 715 MW of
utility scale solar power capacity during Jan-
Mar 2020, about 67% lower than 2,163 MW
added during Q4FY2019.
✓ The wind power capacity addition during Q4
FY2020 was 328 MW, about 65% lower than
944 MW added during Q4FY2019.
✓ Further, as per MNRE data, the utility scale
solar capacity addition for FY2020 was 5.7
GW, about 1% lesser compared to FY2019
installations. Rajasthan (1.8 GW), Tamil Nadu
(1.3 GW) and Karnataka (1.1 GW) were the
leading states and together contributed about
74% of solar capacity additions in the country.
✓ The capacity addition for wind power for
FY2020 was 2.1 GW, about 31% higher than
FY2019 installations. Gujarat led the
installations with the commissioning of 1.4 GW
of new wind projects, followed by Tamil Nadu
(335 MW), and Maharashtra (206 MW).
➢ Maharashtra approves tariff of Rs. 2.90/kWh to
procure 350 MW of solar power
✓ The Maharashtra Electricity Regulatory
Commission (MERC) has approved a tariff of
Rs. 2.90 /kWh for the long-term (25 years)
procurement of 350 MW of grid-connected
intrastate solar power (Phase-V) by
Maharashtra State Electricity Distribution
Company Ltd (MSEDCL) to help it meet its
Renewable Purchase Obligations (RPO).
✓ The tender was floated in December 2019. The
tender was undersubscribed, with only 350 MW
of bids received (Tata Power Renewable
Energy - 100 MW, Avaada Energy - 250 MW)
against 500 MW tendered.
✓ MERC noted that it believed that the tender was
undersubscribed because it was limited by the
fact that it was only for intrastate projects. It
further added that an interstate tender through
an e-reverse auction could have attracted more
bidders and created competition among
bidders.
✓ Maharashtra has been lagging behind in RPO
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compliance and recently filed a petition before
the MERC against its new RPO regulations,
asking it to not levy penalty on non-compliance
until FY 2023.
✓ The solar RPO targets proposed by MERC are
set to increase from 4.5% (2020) to 13.5%
(2025). A total solar capacity of 12,500 MW
would be required by 2025 to achieve this
target while Maharashtra's current contracted
solar capacity stands at 4,200 MW.
➢ Karnataka retains generic tariff of Rs. 3.26/kWh
for wind projects for FY 2021
✓ The Karnataka Electricity Regulatory
Commission (KERC) has issued an order
stating that the generic tariff for wind power
projects will continue to remain the same at Rs.
3.26/kWh as determined in February 2019.
✓ KERC stated that since the Government of
Karnataka is yet to begin calling bids for wind
projects, it has decided to continue the existing
tariff for FY 2021. Further, the tariff of Rs. 3.26
will also be the ceiling tariff for tariff-based
reverse bidding for wind projects, whenever
bids are called.
✓ It added that the generic tariff determined will
also be applicable for payment towards any
banked energy purchased by the distribution
licensees.
➢ Solar tenders of 14 GW were announced in Q4
FY 2020
✓ Despite COVID-19 pandemic, India announced
14 GW of solar tenders and auctioned 3.5 GW
of solar projects during Q4FY2020. The 14 GW
of solar tenders accounted for a dip of only 3%
compared to 14.2 GW of tenders announced
during Q4FY2019 and could generate
opportunities worth around Rs. 55,000 crore.
✓ SECI accounted for 69% of the announced
tenders, followed by Rewa Ultra Mega Solar Ltd
(11%), NTPC (9%) and Gujarat Urja Vikas
Nigam Ltd (9%). All other government agencies
accounted for the remaining 2% of the tender
activity.
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Sector Updates – Power & Renewable Energy
➢ Power demand witnesses decline in April, but
shows signs of improvement in May
✓ According to a recently published report by India
Ratings and Research, the all India energy
demand in April 2020 on yearly basis decreased
22.3% to 85.6 billion units amid the COVID-19
led lockdown on account of a decline in
commercial and industrial demand from major
manufacturing states such as Maharashtra
(down 17.9%), Gujarat (down 26.1%) and Tamil
Nadu (down 28.6%).
✓ The thermal power stations’ PLFs were
impacted the most, given the must-run status of
nuclear, hydro and renewables. The overall
thermal PLF declined to 42.4% in April 2020,
compared to 63.1% in April 2019 and 52.6% in
March 2020.
✓ Short-term power price at Indian Energy
Exchange was quoted at Rs. 2.41/kWh in April
2020 as compared to Rs. 3.22/kWh in April
2019.
✓ The coal production by Coal India Ltd
decreased 10.9% on a yearly basis to 40.4
million tonnes in April 2020. The coal inventory
at thermal power stations rose 61.1% on a
yearly basis to 50.9 million tonnes per annum.
✓ However, the power demand has started
improving since May due to the relaxation in the
lockdown guidelines for certain economic
activities.
✓ According to the data from Power System
Operation Corp Ltd, India’s peak power demand
hovered between 2,700-2,900 MU during April
but touched 3,300 MU during the first ten days
of May. While it went up to 3,600 MU during May
11 - May 20 period, it dipped subsequently due
to the cyclone Amphan in Eastern India.
➢ India, Denmark sign MOU for cooperation in
power sector
✓ India and Denmark have signed an MoU on
bilateral energy cooperation. The MoU provides
for collaboration in offshore wind, long-term
energy planning, forecasting, flexibility in the
grid, consolidation of grid codes to integrate and
operate variable generation options.
✓ In addition to this, flexibility in power purchase
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agreements, incentivising power plant flexibility,
variability in renewable energy production etc
are also areas where the Indian electricity
market would benefit from cooperation with
Denmark.
➢ Real time electricity market launched
✓ A pan-India real-time market for electricity,
aimed at utilisation of surplus capacity in the
power sector, was launched by Union Minister
of Power Mr. R. K. Singh on June 01, 2020. The
real-time electricity market platform is being
offered by Indian Energy Exchange and Power
Exchange of India.
✓ The proposed real-time electricity market will
provide an alternate mechanism for distribution
companies to access a larger market than what
they have at present, that too at a competitive
price. The government also expects that the
new market at a national level will help manage
diversity in the demand pattern in the country.
✓ While in the day-ahead market, participants,
including discoms and other users purchase
and sell energy at financially binding day-ahead
prices for the following day, real-time market
enables buyers/sellers to make a transaction an
hour before the delivery.
✓ The initial trends showed that the electricity
rates in real-time market are considerably lower
than those in the day-ahead market. The State
discoms purchased about 25 MU of energy at
an average price of Rs 1.58 per unit on June 01.
➢ Indian thermal power producers seek more time
to cap emissions
✓ India’s thermal power producers have sought
another extension for capping toxic emissions
from their plants, citing lack of bank funding and
disruptions caused by the COVID-19 pandemic.
✓ The Association of Power Producers has written
to the power ministry, seeking a minimum two-
year extension for installing equipment to
control emissions, such as sulphur dioxide. This
is second waiver sought by the producers who
are required to carry out the procedure in
phases to meet the deadline of December 2022.
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Sector Updates – Transportation
➢ NHAI offers COVID-19 loans and extension of
contract period for BOT (toll) road operators
✓ NHAI has offered COVID-19 loans to BOT
concessionaires at an interest rate of 2% above
the bank rate, if they have not availed or have
not been granted moratorium under RBI
guidelines.
✓ A sum equal to 50% of profit before tax of the
concessionaire, as and when made, shall be
earmarked for repayment of COVID-19 loan.
The concessionaire is required to ensure full
repayment of the loan at least one year before
the end of concession period.
✓ In a further relief to BOT (toll) concessionaires,
NHAI has approved three to six months of
extension in concession period. The extension
will be for a period equal in length to (a) the
period during which the toll collection was
suspended by the government, which is 25 days
(March 26 to April 19, 2020) and (b) the period
in proportion to loss of toll collection on daily
basis (where daily toll collection is less than 90%
of daily average toll collection)
✓ For example, loss of 25% in toll collection as
compared to the daily average toll collection for
four days shall entitle the developer to extension
of one day in the concession period. The floor
and ceiling for extension in concession period
has been set at three and six months,
respectively.
✓ NHAI has defined daily average toll collection as
collection for FY2019 divided by number of days
with 5% escalation added to it.
➢ Highway developers urge NHAI to widen the
compensation coverage
✓ National Highways Builders Federation (NHBF)
has requested NHAI to widen the compensation
coverage and extend the relief to all operating
projects regardless of them being old, and not
keep it limited to model concession agreement.
✓ NHBF has requested for treating the pandemic-
afflicted lockdown as Political Force Majeure
event and demanded more support from NHAI
such as immediate release of 90% of the O&M
costs, as done during demonetisation period.
✓ NHBF has also pointed out that as RBI has only
given moratorium on loans and no waiver of
principal or interest, NHAI should compensate
the developers in terms of longer extension of
concession period and waiver of premium.
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➢ Implementation of Bharatmala Pariyojana may
get delayed
✓ According to ICRA, the first phase of
Bharatmala Pariyojana (BMP), the ambitious
highways programme of NHAI, is likely to get
completed by FY2026 with a delay of four years
because of prevailing uncertainty due to
COVID-19 and the subsequent nationwide
lockdown.
✓ As on March 31, 2020, 16,219 km (around 47%)
of BMP Phase I was pending to be awarded.
ICRA expects the awards to remain in the range
of 3,000-3,200 km in FY2021 and increase
thereafter. The award activity is expected to get
completed by FY2023.
✓ Further, about 21% of BMP execution has been
completed as on March 31, 2020. Given the
limited labour availability due to COVID-19,
ICRA expects the pace of execution for FY2021
to remain low at 3,104 km and thereafter
witness an increase by 10-15% in FY2022
before peaking in FY2024. The pending works
are expected to be completed by FY2026.
✓ NHAI plans to raise funds for BMP Phase-I
through toll-operate-transfer (TOT) auctions
and launch of InvIT. The average cost of
projects awarded so far stands at Rs 23.8 crore
per km, about 54% higher than initial
estimation. The completion timelines of BMP
Phase-I are dependent on the fund-raising
plans of NHAI.
➢ AERA rejects DIAL's demand for 424% hike in
user fees
✓ Delhi International Airport Ltd (DIAL) had
sought an increase in tariff in view of Rs. 9,800
crore expansion which includes expansion of a
terminal 1 and construction of fourth runway.
✓ The Airport Economic Regulatory Authority
(AERA) has rejected the request for hike
through a consultation paper and has instead
proposed to continue with the existing base
airport charges plus 10% formula. It has also
proposed to adjust the tariff collection for third
control period between 2019-2024 with over
recovery of charges done in the previous years.
✓ AERA has further said that it will consider
revised submissions from DIAL in view of
COVID-19 impact on aviation and form a final
view on various aspects of tariff determination.
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Regulatory Updates
➢ RBI reduces policy rates and provides
additional relief measures
✓ RBI has reduced the repo rate by 40 bps to
4.00%. Reverse repo rate too has been
reduced by 40 bps to 3.35%. The Bank Rate
has also been revised downwards to 4.25%.
✓ RBI has allowed increasing group exposure
limit of banks from 25% to 30% of the eligible
capital base. The increased limit shall be
applicable till June 30, 2021.
✓ RBI has allowed moratorium for additional
three months from June 1, 2020 to August 31,
2020 on payment of all instalments of term
loans and interest for working capital facilities.
✓ RBI has allowed banks to recalculate drawing
power on working capital loans by reducing
margins till August 31, 2020, provided that
margins shall be restored to original levels by
March 31, 2021.
✓ RBI has approved extension in timelines for
the resolution of accounts by excluding the
period from March 1, 2020 to August 31, 2020
from the 180 days resolution period.
✓ RBI has extended credit line of Rs. 15,000
crore to Exim Bank for a period of 90 days, with
rollover up to one year, to enable it to avail a
dollar swap facility. This will help Exim Bank
meet its foreign currency resource
requirements and also aid exports.
✓ The RBI has also raised the maximum
permissible period of pre-shipment and post-
shipment export credit sanctioned by banks
from the existing 12 months to 15 months, for
disbursements made up to July 31, 2020.
➢ As NBFCs face redemption pressure, Reserve
Bank hints at more support
✓ A study conducted by RBI has revealed that
the COVID-19 pandemic related disruptions
have impacted market financing conditions for
NBFCs, which could result in higher
redemption pressure and that the NBFC sector
would need further policy assistance.
✓ Based on data up to April 2020, the study
showed that while measures taken by RBI
have eased the stress, further interventions by
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RBI are required to ensure flow of funds to
credit-worthy entities.
✓ The NBFC sector faced a liquidity crunch after
banks turned reluctant in extending the
benefits of loan repayment moratorium to them
while the NBFCs extended the same to their
borrowers.
✓ The study also indicated that the financing
conditions had become challenging recently,
especially for lower-rated NBFCs, due to an
overall environment of greater risk sensitivity
and heightened risk aversion.
✓ The study further said that there is a need for
ensuring flow of credit/liquidity to NBFCs with
concrete credit backstop to address the risk
aversion in the system.
➢ SEBI to consider buyback option for InvIT
✓ SEBI is considering a buyback proposal for
listed as well as unlisted units of InvIT,
facilitating sponsors to buy the units at a
market-linked price.
✓ If permitted, the move could also help
investors, who may be stuck in an illiquid
market since some of them are trading below
their sale price.
✓ InvITs are required to distribute 90% of their
Net Distributable Cash Flow (NDCF). As
buybacks are billed as a mode of distribution
of NDCF, the move is expected to boost the
per unit returns of InvIT and create unit holder
value in the form of capital appreciation.
➢ RBI releases discussion paper on governance
in commercial banks
✓ RBI has proposed stricter governance rules for
commercial banks, following a series of
financial and governance related problems at
lenders in recent months.
✓ RBI’s key proposals include limiting the length
of time a promoter or a major shareholder can
serve as CEO or WTD to 10 years; setting
clear division of responsibilities between a
bank’s board and management; and improving
the supervisory oversight of senior
management.
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Industry Updates
➢ ReNew Power wins 400 MW tender for 24/7
renewables supply in India
✓ ReNew Power has won a tender for entire 400
MW of renewables capacity to deliver round-
the-clock electricity at a tariff of Rs. 2.90/ kWh.
✓ The selected bidder can develop solar, wind or
hybrid power projects. The power plants can
be additionally coupled with energy storage
capacity to meet criteria for delivering
electricity during peak demand periods. The
selection of the storage technology is left to the
developer’s discretion.
✓ SECI will enter into 25-year PPA with the
selected bidder. The contracted capacity has
to be commissioned within 24 months after the
PPA is signed. The selected bidder needs to
maintain 80% capacity utilization factor (CUF)
annually and 70% CUF every month
throughout the term of the PPA. Annual
escalation of 3% shall be applicable on the
quoted tariff up to the 15th year of the contract,
so that levelized tariff would be Rs. 3.60/ kWh.
✓ Greenko, HES Infra and Ayana were other
bidders in the e-reverse auction, which was
oversubscribed by 550 MW.
➢ Adani Green Energy wins bid to set up 8 GW of
solar power plant linked to solar manufacturing
✓ Adani Green Energy has won SECI bid to
construct 8 GW of solar photovoltaic power
plant and 2 GW solar cell and module
manufacturing capacity in five years, which
would entail an investment of Rs 45,000 crore.
✓ SECI has approved the awards under the
greenshoe option in the tenders for the
domestic manufacturing linked projects at a
tariff of Rs 2.92/ kWh discovered through a
reverse auction.
✓ Azure Power under the same scheme won bid
to set up solar PV project of 4,000 MW and
solar kit manufacturing capacity of 1,000 MW.
➢ Alfanar plans to sell 300 MW wind power plants
✓ Saudi Arabia’s Alfanar Group is looking to sell
wind power projects of 300 MW in India and has
appointed JM Financial to find a buyer.
9
✓ Alfanar Group has a clean energy portfolio of
1.4 GW in Middle East, Africa, Europe and
Asia. In India, Alfanar has a wind project
portfolio of around 600 MW that it won in
auctions conducted by SECI.
➢ Dutch pension fund APG evinces interest to buy
stake in Tata Power’s clean energy InvIT
✓ Dutch pension fund manager APG Asset
Management NV has evinced interest in
acquiring 51% stake in Tata Power’ renewable
energy InvIT.
✓ Citibank has been given the mandate to find
an investor for the InvIT that will house 3 GW
of renewable energy projects besides around
Rs. 10,000-12,000 crore of debt.
✓ The others who have separately expressed
interest in the proposed InvIT are private
equity firm Actis LLP, and Canadian pension
funds OMERS, CPPIB and CDPQ.
➢ JSW Energy puts GMR Kamalanga acquisition
on hold
✓ JSW Energy has said that it has put the
acquisition of GMR Kamalanga coal-fired
thermal power plant on hold. The company has
cited the on-going uncertainty on account of
COVID-19 pandemic as the reason and further
mentioned that the transaction will be revisited
once the situation normalises.
✓ In February, JSW Energy had declared that it
had entered into share purchase agreement to
acquire 100% stake in Kamalanga project of
1,050 MW in Odisha for Rs 5,321 crore.
➢ Edelweiss infra AIF acquires two road projects
from Navayuga Group
✓ Edelweiss Infrastructure Yield Plus, an
alternative investment fund managed by
Edelweiss Alternative Asset Advisors Ltd, has
acquired two annuity road projects from
Navayuga Group at undisclosed deal value.
✓ The two acquired projects are the Assam-
based Navayuga Dhola Infra Projects Ltd and
the Arunachal Pradesh-based Navayuga
Dibang Infra Projects Pvt. Ltd.