Alex Power to invest Rs 300 cr for Orissa solar project

Kolkata-based Alex Astral Power Private Ltd has plans to invest close to Rs 300 crore to set up 25 MW solar power project in Orissa, the company said.

“Considering the amount of solar radiation we get in Orissa, we will be needing nearly Rs 12 crore for 1 MW power generation. So, the total project cost would be some where between Rs 280-300 crore including land and equipments,” Pratyush K Sureka, senior vice president (Projects) of Alex Astral said.

The company, which has 25 MW solar plant functioning in Gujarat and another 5 MW plant working in Rajasthan, bagged the contract to set up the Orissa project out of 15 other participants in a tariff-based bidding process.

After the completion of the project, Alex will sell solar energy at Rs 7 per unit to Grid Corporation of Orissa Ltd (Gridco) and in turn, the bulk power power purchaser will agree to buy power from Alex for a period of 25 years. The Power Purchase Agreement (PPA) is expected to be signed in the last week of April this year. “After signing the PPA papers, we will have to set up the plant within 18 months. We have not identified the location for the project , but we hope to find it by May,” Sureka said.

The company will require around 150 acres of land to set up the plant and probably the location will be somewhere close to Bolangir district because of the higher solar radiation the area gets compared to other districts of Orissa, he added.

To meet the cost of the project, Alex will be going through 70:30 debt-equity ratio route. However, the company denied to disclose its loan plans.

“We have not yet decided from where we will be borrowing the money,” Sureka said.

According to the National Tariff Policy, each state electricity regulatory commission specifies a certain amount of renewable energy purchase by the state grid in a time-bound manner. For 2011-12 the Orissa Electricity Regulatory Commission (OERC) has fixed renewable power purchase obligation for Gridco at five per cent of total use, out of which 0.1 per cent or 23.5 million units would be from solar source. By 2013-14, the solar power purchase target would be 45 million units. At present, Orissa has the installed capacity to produce 9 MW solar power and another 4 MW is in the pipeline, said P K Mohan, chief executive of Orissa Renewable Energy Development Agency (OREDA).