Adani gets Gujarat govt nod to build solar power equipment unit4 min read . Updated: 20 Apr 2016, 03:07 AM IST
Work on the first phase of the project has started and is expected to be commissioned this year
Adani Enterprises Ltd has secured approval from the Gujarat government to begin work on building a solar power equipment plant on its own after earlier unsuccessful attempts to build the plant in partnership with technology providers such as clean-power developer SunEdison.
Work on the first phase of the project has started and is expected to be commissioned this year, said two government officials familiar with the plan.
The Adani Group plans to invest $2 billion in the project to make solar panels and solar photo-voltaic cells.
“Earlier this month, the company got an in-principle approval from the Gujarat government’s department of electronics for assistance in setting up core infrastructure as per a state scheme to promote industries," said a senior government official close to the development, requesting anonymity.
For the project, Adani Enterprises has set up special purpose vehicle Mundra Solar PV Ltd. The plant will produce polysilicon, wafers, cells and modules.
According to the project details submitted to the state government, Mundra Solar PV aims to complete phase 1 of the project by the end of this year. The initial phase will include setting up a solar cell and module plant with a capacity of 1,200 megawatts (MW).
The plant will be developed over a three-year period. “This facility will vertically integrate all aspects of solar panel production on site, including polysilicon refining, ingots, wafers, cells and panels production, with a broader ecosystem involving extended supply chain for raw materials and consumables," according to the project details document with the state.
The total cost of phase 1 is about ₹ 2,000 crore, said the government official cited earlier.
The facility will produce about 100MW of modules and photo voltaic cells per month.
The second phase will see the firm setting up a solar panel manufacturing plant with an overall capacity of 3,000MW. In the third phase, the firm will produce polysilicon with a total planned capacity of 10,000 tonnes.
Adani, which was in talks with SunEdison and Foxconn for a joint venture, has decided to go solo, according to the proposal submitted to the state.
While officials of Adani group and SunEdison declined to comment, an email sent to Foxconn on Tuesday has remained unanswered.
Earlier, Adani and SunEdison had signed an agreement at the Vibrant Gujarat Global Investors’ Summit in 2015 to invest $4 billion in a solar photovoltaic manufacturing facility in Gujarat.
However, things did not go as planned and Adani decided to work on its own for now, said the second government official, while adding that the company may rope in technology partners after the first phase is completed.
Reacting to a media report about Adani forming a joint venture with Foxconn for an electronic and solar equipment manufacturing facility in the country, Adani Enterprises, in a BSE filing on 4 August, said talks with Foxconn were at a “discussion stage".
“While SunEdison was asking a high return for its technology, Foxconn wanted to be a majority stakeholder in the joint venture. So, Adani has decided to go solo for now. However, it will need to rope in a technology partner at a later stage," said an industry expert in the know of the development who did not want to be named.
Adani Group has also been in talks with SunEdison to acquire the latter’s Indian assets.
“Adani Group has been approached by bankers appointed by SunEdison for sale of its Indian assets and the group is still analysing the offer," said an investment banker familiar with the development.
Much of the capacity that Adani plans to produce at Mundra is to be utilized for the company’s solar generation plans in India.
The group’s entry into solar power began when Adani Power commissioned a 40MW solar plant in Kutch district of Gujarat in 2011. Following a restructuring of the group in 2015, Adani Enterprises currently executes all solar and renewable energy projects through its Adani Green Energy Ltd unit.
Adani has set up an ambitious target to build a capacity of 10,000MW of solar power by 2022. In the last two years, it has announced at least two big solar power projects—a 10,000MW solar power park in Rajasthan where the firm plans to put up half the capacity itself; and a 648MW solar power plant in Tamil Nadu.
Last year, the group signed a joint venture agreement with Rajasthan to set up a 10,000MW solar park, which will emerge as the largest such integrated facility in India, the firm said in a note last year.
The joint venture, which will be known as Adani Renewable Energy Park Rajasthan Ltd, will have an equal equity partnership between the state and Adani Renewable Energy Park Ltd, a unit of Adani Enterprises. The proposed park, which is expected to draw ₹ 60,000 crore investments, will include a massive manufacturing unit for solar modules, parts and equipment.
Adani is also setting up a 100MW project in Punjab that is expected to go on-stream by July, and a 50MW project in Uttar Pradesh which is expected to be ready by December.
The central government has announced a target to set up 100,000MW of solar capacity by 2022. It also aims to set up at least 25 solar parks each with a capacity of 500MW and above across India.