How did the deal with Adani Enterprises happen and what are your plans with this joint venture?
This is more of a memorandum of understanding. We were scouting for an aggressive long-term partner for a venture of this scale. Our belief is India would be the largest renewable energy market and solar would be the prime focus. We are in the early stages of a partnership, and still looking for a suitable location. But we are of the view that as the size of the solar market is expected to touch $150 billion, India would need a supply chain.
The growth plans in India?
India is one of top-three markets for us. A growth forecast in terms of numbers is difficult to share as, unfortunately, growth in India depends on the policy governing it. We are eagerly waiting for the government to operationalise its plans. We can then make our plans. There are no yearly targets set by the government yet, so we don’t have the numbers attached to our plans in India.
SunEdison’s commitment to build 15 gigawatts of solar power in the country is a huge target. What spurred the company?
Solar is going to get big in this country. There is a huge demand for power and the next major step is growth in this sector. We have to see who has the long-term vision to cater to this demand. The government is targeting 100,000 megawatts (Mw) in seven years. We think it could be more than that. Local manufacturing would grow, as no government wishes to spend billions on importing. If incentivised, solar stands to benefit the most from the government’s Make-in-India programme.
The policy push that India’s solar dream needs?
The government needs to support serious companies, that are here for the interest of the sector. State money should be spent in creative measures to help such companies. The cost of solar would come down to Rs 4 a unit if dollars are brought into the country.
Evacuation of power and land availability remain a challenge in India. What's your plan and expectations from the government?
There are some challenges in any market. These can be solved with innovative business solutions. For instance, if I can’t get a swathe of land, I will buy small pockets to set up 30 Mw to 50 Mw on each, pool, and sell power. These are not insurmountable issues. The approach needs to be there. There is barren land in several terrains that can be used for solar power plants. Eventually, evacuation would also fall in line with increased generation.
As the rate of interest for power projects in India is quite high, what is the financing model that works the best?
If the government wants to attract the pent-up capital globally, power purchase agreements should be made dollar-denominated. Tens of billions of dollars can come in India as long-term financing. But, the currency market is such that long-term hedging is difficult in India. The government needs to discuss with the the Reserve Bank of India to eliminate currency risks for equity investors. Power purchase agreements should be dollar-indexed and the investor should be allowed to take debt in rupees on the account books.