BackSignify, Okaya ahead in race for $28 bn EESL order
The first phase of the order will be for 9.3 mn home power systems including a solar panel and LED bulbs
PremiumSignify Innovations India Ltd (formerly Philips Lighting) and Okaya Power Group have emerged as frontrunners for an estimated $28 billion order to supply solar home systems, said two people aware of the development.
Croatia’s Solvis d.o.o. and New Delhi-based Gautam Solar Pvt. Ltd have also submitted bids to state-run Energy Efficiency Services Ltd (EESL) for supplying as many as 47 million home power systems, billed as the world’s largest such tender.
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EESL—a joint venture between NTPC Ltd, Rural Electrification Corp. Ltd, Power Finance Corp. Ltd and Power Grid Corp. of India Ltd—is conducting the price discovery exercise for the member nations of the International Solar Alliance (ISA).
The first phase will be for 9.3 million home power systems—each comprising a solar panel, battery, LED bulbs, fan and charging ports for radio, TV and USB.
“A total of four bids had come, in which Philips and Okaya Power are the frontrunners. The technical evaluation is going on," one of the two people cited above said, asking not to be named.
EESL would seek to replicate a price discovery exercise it had conducted earlier by aggregating demand from ISA member nations for solar-powered agricultural pumps. This led to the prices of such pumps falling by half. Tenders such as these are also expected to attract global manufacturers that are exploring a China-plus-one strategy for production.
The price discovered from the solar home system tendering process will be offered to all ISA member nations for acceptance and serve as the reference point for such large global orders.
India plans to become an integral part of global supply chains as firms look to move production lines out of China.
An EESL spokesperson confirmed in an emailed response the bids from Signify Innovations India, Solvis, Gautam Solar and Okaya Power.
“The technical bids for 9.3 million solar home system have been opened on 15 December. Bid evaluation is in process, and only after the evaluation, the bidders for the next round of price bid opening can be ascertained," the spokesperson said.
“Details of these kinds of tenders are confidential. Therefore, we can neither confirm nor deny that we’re part of this tender. For any information of this process, we suggest you follow up with EESL," a Signify Innovations India spokesperson said in an emailed response to a query.
An external spokesperson for Okaya declined to comment.
“EESL is helping us finalize the bid," an ISA spokesperson said in an emailed response.
Solvis and Gautam Solar couldn’t be contacted.
ISA’s strategy is to reduce costs by aggregating demand from member nations and then seek global bids. It has aggregated demand for solar pumps, rooftops, mini-grids, parks and home systems. As many as 88 countries have signed the ISA framework agreement, while 70 have ratified it so far.
EESL is acting as a bid management agency hired by ISA.
The tender document reviewed by Mint said: “To provide energy access to 1 billion population without electricity, ISA plans to facilitate the provision of solar home system with different configurations."
“To facilitate this, ISA shall explore the price of the solar home system for ISA member countries. EESL shall help ISA in exploring the price band in different ISA member countries," the tender stated.
The tender comes amid the government announcing production-linked incentives worth ₹1.97 trillion to manufacturers in 10 sectors, including those of high-efficiency solar modules and advance chemistry cell battery, to boost local manufacturing.
Separately, the government has announced plans to impose a basic customs duty of 40% on modules and 25% on solar cells imports from 1 April 2022. The government also plans to build three large manufacturing zones in a coastal state, a hill state and a land-locked state, respectively, for power and renewable energy equipment by offering incentives to the manufacturers.
Co-founded by India and France, ISA is the first treaty-based international government organization to be based in India and has emerged as a significant foreign policy tool for India. Given China’s Belt and Road initiative that seeks to invest billions of dollars in infrastructure projects such as railways, ports and power grids across Asia, Africa and Europe, Indian state-run firms are trying to leverage ISA to land projects in its member nations.
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