Mumbai: Pashupathy Gopalan, president, Asia-Pacific, at SunEdison Inc., is looking to spend a majority of his time at the India division of the world’s largest renewable energy company as the country gains top priority and is second in line after the US.

The struggling US company—which has lost more than 80% of its stock value in the last one year and announced big cost cuts—plans to bid for upcoming solar tenders under the National Solar Mission in India and continue to sell stake in some Indian assets.

From having set up solar projects in countries such as India, Thailand, Malaysia, South Africa, China and Japan since joining SunEdison in 2009, Gopalan has now been entrusted with the responsibility of growing business in India alone.

The firm on 24 November said it was terminating a deal to buy Continuum Wind Energy Ltd and was selling 425 megawatts (MW) of capacity in India to its yieldco TerraForm Global Inc. for $231 million (in the yield co model SunEdison sells operating assets to the yieldco company, which collects revenue by selling power/electricity to pay dividends to shareholders).

SunEdison’s long-term plan in India is to develop over 15 gigawatts (GW) of wind and solar projects by 2022. In an exclusive interview, Gopalan spoke about the company’s plans for the Indian market. Edited excerpts:

Are you taking over SunEdison’s India operations? Is there a change in your role?

In the last six years I have probably only spent 25% of my time in India. Going forward it will be 99% of my time. My CEO wants 100% focus on India, but other geographies still need some leadership. But right now you have to consider me as the India CEO. From a behaviour perspective, from 1 October, I am president of Indian operations and not Asia-Pacific. We are very informal as a company; our focus is going to be India. I will also have to look at the other countries in the region in the meantime.

What prompted you to step forward and clarify on 24 November that your company was not in trouble in India?

Media reports gave a sense that we were leaving India or somehow selling everything and packing off from India. I had so many people calling and expressing sadness that we were leaving India. I think selling assets is just part and parcel of what we do and it’s a small percentage of what we do to raise capital. So selling assets is not such a bad thing, it’s our way of monetizing value.

You said you will continue to sell assets in India after you sold about 425MW to your yieldco TerraForm Global. How will this model help grow capital?

What it means is SunEdison is a developer of the asset, we develop the projects, which means we buy the land, we get the permission, we get the power purchase agreement, we do the bidding, we design and construct the power plant, manage sub-contractors, get the lenders to give us debt and finance the project.

Once the project is operational, where it has reached COD (commercial operation date) and started to generate revenue, we don’t want to own the assets. We will transfer the asset or sell it to somebody else. One, we will sell it to our own yieldcos—TerraForm Power and Terraform Global—where we are the controlling shareholders. So we moved the 425MW of assets to our yieldco.

We will from time to time look for third party sales as well; it is a part of our fabric. We will explore selling 10-15% of our assets to third parties. In the third quarter ended 30 September, SunEdison sold 106MW of our assets. It’s not a big deal, it’s just our business to develop and sell assets. We need capital because we are growing. We need to figure out ways to continuously monetizing the value, so that for next year I will have capital.

What is your forecast of capacity addition in India?

India business has grown quite a bit in the last month alone. We won the 500MW project in Andhra Pradesh, we are awaiting results in Telangana for a couple of hundred MW, we are exploring some wind projects for a few hundred MW. So suddenly we have 1,000MW more in the last month or so. India is number two for us after America. In the markets I have helped SunEdison grow, I think India is by far the best market, after that it is a struggle. From aspiration perspective, China is interesting but we have not managed to develop a strong business there yet.

The calendar year 2016, we have committed to adding 3.3-3.7GW of capacity globally, out of that India will be around 20-25%, which makes it one of the most important geographies for us globally.

We have close to 2GW to build in India in 18-24 months. Think of it as a factory-like process, every three months we have 300MW becoming operational. We will continuously evaluate options. At the end of it, we will choose to keep it sometimes or sell.

There are four options: we build and just leave in our balance sheet, build it and after they are operational sell to our yieldco which is controlled by us, third is build it and sell it to our equity partnership, which again may be entities which we control where we bring in other shareholders. We have raised $3.7 billion in creating warehouses in the last four to five months with Goldman Sachs, JP Morgan, Macquarie and John Hancock and First Reserve. We are looking to bring this warehouse model to India because it provides the cushion or the money needed to redeploy in business. We are happy to have dialogues with global pension funds and sovereign wealth funds to invest in the warehouse model in India.

What is your bidding strategy for solar projects in India?

We will continue to participate and try to be a serious participant in the Indian market. We will continue to bid and make sure we are bidding at prices that we believe we can execute. We are in the business to make money; we are not in the business to do charity and not in the business to demonstrate that we are a leader without making money. It appears that going forward there will be a lot of activity driven by the National Solar Mission, by NTPC Ltd, so we will focus more on that going forward.

SunEdison’s bid at the National Solar Mission tender in Andhra Pradesh brought solar tariff to an all-time low of 4.63, which is being called unviable by some. You expect them to lower in future auctions?

Tariffs in solar industry are relevant at a point in time. It is also a function of that specific project—which location, which state, the sunlight available in that location, is the government giving you land or giving you transmission line, when do you need to execute the project. Even six months difference can make a drastic difference in solar because the industry is very dynamic.

It’s hard to compare two separate bids separated in time even by three months and different locations. Rajasthan has higher insulation, Tamil Nadu or Karnataka may be lower insulation. I think the ballpark figure that we can say is the 4.63 (per kilo-watt hour) tariff for projects that will be constructed in the calendar year 2016. This seems like a reasonable price; below this it may be difficult. But who am I to say that some competitor of ours hasn’t figured out how to reduce their cost of capital. They may choose to borrow in US dollars or Japanese yen and choose to take the risk in their corporate balance sheet.

SunEdison did not bid aggressively (in Andhra Pradesh) on its own. Tata, Adani, Reliance, EDF Energy, Enel, Engie (GDF), Fortum, they all bid within 20-30 paise of ours. In solar, 20-30 paise is not a big deal.

We understand your deal to set up a $4 billion solar photovoltaic manufacturing facility with Adani Enterprises is not moving forward?

That is a manufacturing project I’m not involved with. There is a non-binding MoU (memorandum of understanding) and it is not a committed JV (joint venture) yet. Honestly, these are dialogues that take a long time. It can sometimes take several years as these are $4-$5 billion manufacturing operations and people move with tremendous caution on such big operations.

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