Indian independent solar power producer Azure Power is set to develop 2GW interstate transmission (ISTS) solar power project in the country.
The company received a letter of award (LOA) from Solar Energy Corporation of India (SECI), a Government of India enterprise.
The power project will be developed somewhere in India and will be commissioned in multiple 500MW phases annually starting from 2022. It is slated to become fully operational by 2025.
Additionally, the LOA includes a greenshoe option that will allow Azure Power to double the capacity of the project. However, the company should take the decision in five days from the date of award of LOA to exercise the option.
The project also requires establishing a 500MW cell and module manufacturing capacity unit.
Azure Power has already entered into an in-principle agreement with a local solar panel manufacturer to acquire a majority stake in this unit by committing 26% of equity investment. Azure Power and SECI are expected to sign a 25-year power purchase agreement at a tariff of Rs2.92 (4.1¢) per kWh.
Azure Power CEO Ranjit Gupta said: “This opportunity is attractive to us for many reasons. The tariff is 8% higher than the last discovered tariff for an ISTS project with SECI which is one of the best solar counterparties in India.
“Now with a 5GW portfolio, our scale and the predictability of our growth over the next five years should allow us to capture significant efficiencies.”
In August 2019, the company was awarded another contract for a 300MW ISTS solar power project. This farm is expected to become operational in 2021.