Azure Power, a solar power producer in India, announced that it has received a letter of award (LOA) for a 2 GWs interstate transmission (ISTS) solar power project with Solar Energy Corporation of India (SECI) to supply power for 25 years at a tariff of INR 2.92 (~US 4.1 cents) per kWh. The solar power project can be developed anywhere in India and is expected to be commissioned in staggered annual phases of 500 MW each with the first commissioning expected by 2022 and full commissioning by 2025. The power purchase agreement (PPA) allows for the waiver of ISTS transmission charges and improved protections from curtailment. As part of the LOA, the company can elect in the next 5 days to double the capacity allocated as part of a greenshoe option.

The project also comes with a 500 MW cell and module manufacturing capacity requirement. Azure Power has an agreement in principle with a leading Indian solar panel manufacturer to take a majority ownership stake of this manufacturing requirement and the total investment requirement by the company is expected to be limited to 26% of equity investment.

Speaking on this occasion, Ranjit Gupta, Chief Executive Officer, Azure Power 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 5 GW portfolio, our scale and the predictability of our growth over the next five years should allow us to capture significant efficiencies.”