Thursday, September 1, 2011

Solar JNNSM Batch-2 pickup - RfS deadline 23 Sep

The guidelines for batch-2 of JNNSM are announced by MNRE and available here. NTPC Vidyut Vyapar Nigam (NVVN) has issued the Request for Selection (RfS) document due date for submission as 23 September 2011.

Some important considerations in the guidelines
  1. Plant Size:
    • Total capacity under bidding – 350 MW
    • Minimum capacity of a single PV plant – 5 MW
    • Maximum capacity of a single PV plant raised to 20 MW.
    • Plant capacity will be in multiples of 5MW. In other words, a developer can bid for projects of size 5 MW, 10 MW, 15 MW or 20 MW.
  2. Company structuring:
    • A company in any form (including parent, affiliate, ultimate or any group company) can bid for a maximum of 3 projects totaling 50MW.
    • Foreign companies can participate in the bidding process. But before signing of the PPA, they have to form an Indian company registered under the Companies Act, 1956
    • Controlling shareholder of the project must maintain 50% share for 1 year (up from 26% in earlier Batch-1 RfS)
  3. Financial selection criterion:
    • Minimum Net worth of Rs. 3 Crore/MW upto 20 MW size of project and there after Rs. 2 Crore/MW. Share premium not to form part of the Net worth calculation. Also Net worth to be established atleast 7 days prior to RfS submission.
  4. Technology selection criterion:
    • Domestic requirement – Both cells and modules have to be manufactured in India. This domestic content requirement does not apply for Thin film and Concentrating Photovoltaic(CPV) technologies.
    • The bidder will have to deploy only commercially proven technology – those that have at least one project successfully operational for at least  one year, anywhere in the world.
    • Inter-connection authorization letter from State Transmission company to allow evacuation of power at voltage level 33KV and above.
  5. Pre-operative costs:
    • Processing fees for each project application in RfS is Rs. 1 Lakh
    • Earnest Money Deposit (EMD) of Rs. 20 Lakh/MW in the form of Bank Guarantee along with RfS. 
    • Bid Bond in the form of Bank Guarantee along with RfP bid (with Bid bond value proportional to tariff discount given during 'reverse bidding') 
    • Performance Bank Guarantee of Rs. 30 Lakh/MW at the time of signing of PPA.
    • So for a 10MW Solar PV project, this will boil down to following investment:
      • For RfS: Rs. 1 Lakh processing fee + Rs. 2 Crore EMD to be given with RfS + Rs. 4 Lakh (2% EMD fees to bank)
      • For bidding: For bidding a tariff rate of lets say Rs. 11.23 per unit (i.e. discount of 416 paisa from base rate Rs. 15.39 per unit or 27.03% discount), bid bond of Rs. 10.03 cr. will be required.
      • For PPA signing: Bid bond conversion into security + Rs. 3 cr. security will be required 
    • Some key changes in pre-operative project cycle:
      • Deadline for achieving financial closure raised to 210 days (7 months) from the earlier 180 days(6 months). The timeline for the commissioning of the project is also extended by a month – to 13 months from the date of signing PPA from 12 months earlier.
      • “Part commissioning of the Project shall be accepted by NVVN subject to the condition that the minimum capacity for acceptance of part commissioning shall be 5 MW and in multiples thereof. The PPA will remain in force for a period of 25 years from the date of acceptance of respective part commissioning of the project.”
    • Tariff rates:
      • The base tariff rate decided for batch-2 Solar PV projects is Rs. 15.39 Rs./kWh (against old rates of Rs. 17.91 Rs./kWh)
As part of the Solar Practice, pManifold focuses on helping clients keep pace with the fast evolving industry and the opportunities there in through services for:
  1. Bid Advisory - RfS filling and Financial Modelling/ Cost Optimization for Bid Preparation: pManifold supports bidders in a step by step approach for filing Rfs and Bids for the JNNSM program through,
    • Site/Resource Assessment
    • Pre-feasibility, and Feasibility report as per national or state guidelines
    • Bid strategy to offer “winning” discounting rates
    • PPA signing &
    • Financial closure
  2. Strategic Consulting - Entry Strategy, Acquisition, Partnership Development, Vendor Sourcing: With sound knowledge of the Solar industry we are able to assist businesses to evaluate their best possible options in entering Solar sector through,
    • Existing Portfolio Analysis
    • Acquisitions
    • Partnership Development
    • Product Selection & 
    • Vendor Selection for EPCM, EPC, Technical, Financial, etc.
  3. Investor Education -Through detailed Financial Model vetted by experts:
    • pManifold makes it easy for all stakeholders to understand the MW-scale solar grid-connected projects by tying up the JNNSM guidelines, financial parameters (like interest rates, carbon credits, taxation), technical parameters (like solar resource estimations) and strategic parameters (like company structuring to avail benefit of accelerated depreciation, cost optimizations due to synergies with existing business portfolio of the bidder) into a detailed financial model. 
Post by: Rahul Bagdia @ pManifold

No comments:

Post a Comment