CleanTech/ Renewable Energy, Other, solar

Mahagenco invites bids with ADB support

According to reports, the Maharashtra State Power Generation Company (Mahagenco) is asking solar energy producers if they would like to build, operate and maintain a solar power plant, on a quasi-ownership model.

The selected developer would have to raise the finances and set up the plant, maintain it and generate power. The asset would be in Mahagenco’s books for 10 years, after which the developer will get a right over the project.

“This is the first time for this model in India. We are trying to ensure developers are sure of this project and must be aware of it,” said Ajoy Mehta, managing director, at a workshop arranged to discuss possible bids. Mahagenco will arrange the land and distribution infrastructure for the project. After commissioning, it would pay half the capital cost to the developer.

A tender for this project is expected in the next six to eight months. The first tender would entail a project cost of Rs 400 crore, requiring a possible 50 Mw capacity. If successful, the model could see 400-500 Mw capacity.

Mahagenco’s investment into the project would be financed by the Asian Development Bank (ADB). “This is a model which could be followed by other states, too,” said Srinivasan Janardhan, finance specialist at the ADB, at the workshop. The bank says the selected bidder would have to order equipment from its member-countries. “Most Asian countries are our members,” he said.

Many solar power companies at the workshop raised queries on the difficulties that could arise in raising finances for a project not owned by them.

“The developer would get a secured power purchase agreement,” said Debashish Mishra, senior director, Deloitte Touche Tomatsu. Deloitte is advising Mahagenco to develop this bidding process. “We are seeing a lot of developer interest,” he said.

The choice of technology to be used would lie with the developer. Mahagenco has sought comments. After considering these, the idea is to come up with a technical round of bids, to be followed by the final selection involving financial bids.



One thought on “Mahagenco invites bids with ADB support

  1. If ADB and Mahagenco have decided this model, why not they publish the Financial numbers whether it is in the interest of public?? 50% Funding is from the Government (i.e no equity from the bidder, on the contrary, the bidder will be sitting on excess cash at Government cost??)

    a). 50 x 8 = Rs. 400 Crore investment from the bidder. This will be a barrier for many or is this system designed for few select people and why such strange system? Whether the bidder can take Accelerated Depreciation on the whole investment? if so, look at this:

    80% Depreciation = 0.8 x 400 = Rs. 320 Crore tax saving by a large corporate or a Jewellary or Brewary or such corporate. I will invest this fund instead of paying taxes to the Government.

    Another Rs.80 Crore will be arranged from Balance Sheet funding, thus, Mahagenco is aiding / encouraging the corporate company not to pay taxes to the Government with ADB !!

    In one year 50% of 400 Crore = rs. 200 Cr will be paid back to the Corporate Company i.e Cash Positive for a Non tax payer, what kind of business plan is this ?? How the Finance secretary of Maharasthra or Indian Government keep quite on this kind of business model??

    The corporate company gets interest free funding of (200 -80 = Rs. 120 Crore) for furthering its business at the cost of Mahagenco + I do not know what is the tariff with which this company will be made further rich at the cost of dying farmers that to through ADB, which is an international organisation trying get business for their Japanese companies through Mahagenco??

    After 10 years, the asset will be for the Corporate company at the Cost of Mahagenco of Rs. 200 Crore, why poor farmers of Maharashtra who are not having water have to pay…. Mahagenco shall pay this Rs. 200 Crore to farmers with Solar Irrigation pumping systems from ADB, instead of making a Corporate rich… i can advise MAHAGENCO and i have written to them on this solar irrigation pumping solutions…..

    is this kind of Business model proposed by Mahagenco promote: Country first culture ??

    Posted by praveen Kulkarni | March 28, 2013, 10:44 am

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