India called for bids to build 750 megawatts of solar plants in its first national auction since 2011 and is offering about 18.75 billion rupees ($303 million) in grants.
Bids are due by Nov. 29, state-run Solar Energy Corp. of India said on its website. Tender documents will be available from next week. Developers will submit bids specifying the funds they’re seeking and the lowest bidders will win. The government grants will cover as much as 30 percent of the project cost.
Companies such as Welspun Group, backed by Leon Black’s Apollo Global Management LLC (APO), and billionaire Vinod Khosla’s Sunborne Energy Holdings LLC have built nearly 2,000 megawatts of solar capacity and cut average costs by more than half since India began auctioning licenses through its National Solar Mission in 2010. The program seeks to reduce solar power costs to levels in line with other forms of grid-supplied electricity by 2017.
Of the 750 megawatts, 350 megawatts must be built with domestically manufactured solar cells and panels, according to revised rules published on the Ministry of New and Renewable Energy’s website.
Forcing projects to buy local equipment will raise costs and compromise quality, Vineet Mittal, managing director of Welspun Energy Ltd., India’s biggest photovoltaic developer, said in an August interview.
The government will stagger disbursal of the grants to ensure projects meet milestones, the ministry’s rules show. Fifty percent will be paid upon plant completion and the balance in 10 percent increments over the following five years, if generation targets are met.
Investors will be able to sell their projects after a one-year, lock-in period. Moser Baer India Ltd. (MBI), Lanco Infratech Ltd. (LANCI), Indosolar Ltd. (ISLR), and Websol Energy System Ltd. (WESL) are among the biggest Indian makers of solar equipment.
Copyright 2013 Bloomberg
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