Fitch Ratings today said Greenko Energy Holdings’ credit profile is not affected by its acquisition of SunEdison’s India portfolio. “The agency expects GEH’s leverage to increase temporarily at the end of the financial year to March 2017 (FY17), before improving from FY18 as the acquired assets chalk up a full year of operations,” it said in a statement.
GEH announced in September 2016 that it will acquire about 390 MW of SunEdison’s solar and wind power generation assets in India that are operational or close to coming on line. As a part of the transaction agreement, GEH will take over SunEdison’s pipeline of solar generation projects in India at no additional cost. These projects in the pipeline have total capacity of 653 MW.
About 83 per cent of the total capacity that GEH will acquire is in its current regions of operations – Andhra Pradesh, Telangana and Karnataka – while the rest is mainly in Tamil Nadu. This may provide certain operational synergies if this solar capacity is combined with its largely wind-based generation portfolio in these regions.
The assets that are operational or close-to-operational include 343 MW of solar power generation assets – marking GEH’s entry into India’s solar market.
About 249 MW of this solar power capacity started operations in FY2015-16 and another 52 MW started over May-July 2016. GEH expects the balance 90 MW of solar power plants to start operations over October-November 2016.
Most of these projects benefit from power purchase agreements with 20-25 year terms and tariffs ranging from Rs 5.10/kWh to Rs 7.01/kWh for the solar projects, which Fitch views as attractive, relative to tariffs for projects that have been offered recently in India.