Essel Group and JA Solar to set up $ 200-mn solar module in AP

Solar modules project will be a 50:50 joint venture between both the companies

Mumbai-based Essel Group is planning to set up a solar module manufacturing project at Sri City industrial park in Andhra Pradesh.

The project will be set up in joint venture with Chinese company JA Solar Holdings with an investment of $ 200 million (Over Rs 1,300 crore).

"We have already applied for a land parcel in Sri City for this purpose," Essel Infra projects chief executive officer Ashok Agarwal told Business Standard while giving out the details of the project.

According to Agarwal, the solar modules project will be a 50:50 joint venture between Essel and JA Solar and is going to have a manufacturing capacity of 500 Mw of solar modules.

Andhra Pradesh government has already been in talks with two Chinese solar panel manufacturers, with whom chief minister N Chandrababu Naidu interacted during his visit to China earlier this year, regarding their investment plans in the state.

Essel's foray into solar module manufacturing and its choice of location comes at a time the Southern states including AP, Tamil Nadu and Telangana announced huge installed capacity through reverse bidding route. The governments themselves would buy power at a rate finalised in the competitive bidding process from the private solar power developers.

The company is also looking at other investment opportunities in Andhra Pradesh. Essel Group chairman Subhash Chandra yesterday met with AP chief minister Naidu and evinced interest in investing in areas of entertainment among other things.

Essel signs MoU with CII for smart city pilot projects

Meanwhile the Essel Infra projects today signed an MoU with the Confederation of Indian Industry (CII) to form "Indian Technical Consortium" to be set up under the CII National Mission on Smart Cities project in the country. Government of India has mandated the CII to conceptualise these five pilot projects for their implementation. According to Agarwal, the company wants to become the master smart city developer for these projects.

Agarwal said their company had acquired a lot of experience in execution of smart city projects and capable of offering as many as 40 services including solid-waste management in urban and sustainable development areas

"We hope to bid for all the five projects when they reach the tender stage as we also thoroughly understand how public private partnership(PPPs) works," he said.

While the Centre and the state together require to bring Rs 1,000 crore investment for the implementation of each smart city project, the expansion of the capital base by bringing in a private player to a level of Rs 2,000 crore for each SPV either in 50:50 or 51:49 joint venture basis will make things work, he said.

Depending on the tax base of a particular municipal body an SPV can raise as much as Rs 7,000 crore to Rs 8,000 crore debt for executing the smart city projects, he said.

The company is likely to file for an initial public offer (IPO) towards the end of this year.