Mahagenco invites bids with ADB support

Last Updated: Tue, Mar 26, 2013 20:32 hrs

The Maharashtra State Power Generation Company (Mahagenco) is asking solar energy producers if they would like to build, operate and maintain a solar power plant, on a quasi-ownership model.

The selected developer would have to raise the finances and set up the plant, maintain it and generate power. The asset would be in Mahagenco's books for 10 years, after which the developer will get a right over the project.

"This is the first time for this model in India. We are trying to ensure developers are sure of this project and must be aware of it," said Ajoy Mehta, managing director, at a workshop arranged to discuss possible bids. Mahagenco will arrange the land and distribution infrastructure for the project. After commissioning, it would pay half the capital cost to the developer.

A tender for this project is expected in the next six to eight months. The first tender would entail a project cost of Rs 400 crore, requiring a possible 50 Mw capacity. If successful, the model could see 400-500 Mw capacity.

Mahagenco's investment into the project would be financed by the Asian Development Bank (ADB). "This is a model which could be followed by other states, too," said Srinivasan Janardhan, finance specialist at the ADB, at the workshop. The bank says the selected bidder would have to order equipment from its member-countries. "Most Asian countries are our members," he said.

Many solar power companies at the workshop raised queries on the difficulties that could arise in raising finances for a project not owned by them.

"The developer would get a secured power purchase agreement," said Debashish Mishra, senior director, Deloitte Touche Tomatsu. Deloitte is advising Mahagenco to develop this bidding process. "We are seeing a lot of developer interest," he said.

The choice of technology to be used would lie with the developer. Mahagenco has sought comments. After considering these, the idea is to come up with a technical round of bids, to be followed by the final selection involving financial bids.

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