News Detail

News:

State-run generation utility is considering dollar-denominated tariff to bring down cost of power from its solar projects to less than Rs 5 per unit, the lowest that promoters have bid for a project being set up by the Madhya Pradesh Government.
Source: TOI

SNP Insight:

Source of fund from foreign countries alone can reduce the cost of debt by approx. 2.5% -3.5% and by introducing dollar- denominated tariff can shield the risk against the foreign exchange which may further reduces the cost of debt by 5%-6% landing it to be around 3%-5%. With such a small rate it is likely to achieve the tariff around INR 4.5 including hedging (risk against rupee depreciation) amount of INR 0.90 per unit, which may augment the solar capacity installation in the country moving toward ambitious target of 100 GW by 2022.
Source: SNP Infra Research