General Electric has announced its first major investment in the Indian solar energy sector. The beneficiary is the largest operational solar power plant in India.
The American major has invested $24 million in 151 MW solar photovoltaic power project owned by Welspun Energy. The plant was commissioned in February this year in Madhya Pradesh under the state’s solar power policy.
The cost of the project was almost US$200 million (₹1,185 crore). Welspun Energy acquired debt financing worth about US$150 million for the project. The company will use the equity infusion by General Electric to pay off a portion of this debt.
Welspun Energy had secured the tender for the project through a reverse auction organized by the Madhya Pradesh government. The company offered to set up the project seeking a tariff of US$0.14 per kWh. At this rate, the project is expected to bring in annual revenue of about US$35 million every year.
According to reports, with this investment General Electric’s global investment in renewable energy has crossed US$10 billion.
Being one of the leading solar power developers in India it is hardly surprising that Welspun Energy has attracted such substantial equity infusion from global leader like General Electric.
Welspun Energy has an installed solar power capacity of just over 300 MW or about 10% of the entire Indian solar power capacity. The company has secured several solar power projects under the central government’s National Solar Mission as well as state solar power policies. India recently announced a target to increase solar power capacity addition target to 1,000 MW in 2014.
The direct equity infusion in a power plant in a project may point towards an increased confidence in the Indian solar energy sector as, up until now, PE infusion has been witnessed majorly in wind energy and, to certain extent, biomass energy sector.
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