SunEdison’s problem could slow down growth for now.
India’s plans to build 175 GW of renewable energy—100 GW solar, 60 GW wind, 10 GW small hydro and 5 GW biomass—by 2022 could be in trouble. It’s not because of the government. It’s because the US-based SunEdison—the leader in renewable energy which recently won a bid for a 500 MW project in Andhra Pradesh at an all-time low tariff of R4.63/kWh—is looking to sell some of the assets it operates in India (400 MW) for around $350 million. The company, which operates 450 MW of solar plants in India, has another 800 MW in development apart from the new 500 MW project. The India move is a fallout of the problems that SunEdison is facing globally. It started with its plans to stop sales of solar projects and developments to its dividend paying yield companies (yieldcos)—TerraForm Power and TerraForm Global—which were created after the company spun off its semiconductor business portfolio. These companies were created for the sole purpose of buying the solar and wind projects that its parent handed over to it.
In the process of becoming the fastest growing power generation company, SunEdison stretched itself too far. Apart from debt of over $11 billion, it also needed $8.8 billion to build its projects over the next year. But when the stock market turned, it took down the two yieldcos that had listed on the Nasdaq earlier this year. Now there is a serious attempt to restructure SunEdison. What the company is looking to do is monetise some of its assets to raise capital in the short term. While it is unlikely SunEdison would exit India totally, it remains to be seen who could be interested in acquiring its Indian assets for now.