Investor Presentation
Industry and Regulatory Update
14 GWs of new tenders released and only ~10 GWs allocated
in FY'21 so far, significantly below the level in FY’20. Recent
drop in tariffs and concerns about COVID has delayed signing of
PPAs for about 19 GWs of auctions already undertaken.
Azure's access to low cost capital and established platform
can enable significant further growth with projects that have
returns well above our cost of capital. Increased competition in
recent auctions likely temporary and was driven by the lack of
auctions during COVID. We believe that competition in future
auctions could moderate with normal levels of auction activity. The
maximum solar capacity developed in a year has been ~10 GWs,
well below Govt of India's target of 25 30GWs of new capacity
annually through 2030.
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Significant supply constraints for modules and glass from
China. Azure's large development pipeline and supplier
relationships are providing a local advantage.
An additional 20 GW of transmission from Rajasthan is being
planned as part of Solar Energy Zone Ph-III scheme with a target
to commission the new transmission system prior to June 2023.
Favorable policy/ regulatory changes. Clarity that recovery will
occur under change in law for Basic Custom Duty (BCD) imposition.
Restrictions related to the Approved List of Modules and
Manufactures (ALMM) will only apply to bids that close 30 days after
ALMM is notified. ALMM could create a short term module supply
disruption as foreign module manufactures may have to be
accredited. No Azure project is impacted by ALMM and BCD.
Increased focus on developing new ultra-mega solar parks. A
new 30 GW solar park in Gujarat is being planned and a 7.5 GW solar
park in Leh & Kargil is expected to be retendered. Solar park options
could absorb foreign capital due to lower development risks reducing
competition for non solar park projects that Azure has a competitive
advantage in.
Budget proposals to improve DISCOMs and introduce customer
choice for supply. The central government is allocating $40bn over
five years to upgrade DISCOM infrastructure and technology to make
them more efficient and improve DISCOMS financial health. Supply
competition is also being introduced to allow greater customer choice,
including low cost renewable energy.
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