Azure Power had won a 4 giga-watt (GW) renewable plus manufacturing plant auction in October 2019 which got converted into a letter of award in June 2020 but still awaits a power purchase agreement as state power distribution companies (discoms) remain financially stressed.
Analysts at HSBC downgraded the rating of Azure Power to ‘hold’ from ‘buy’, as the government increasingly finds it harder to find buyers of solar power.
Azure’s untied capacity is a part of the 12 GW projects awarded in the maiden auction for the manufacturing-linked solar scheme, through which Adani Green Energy will build 8 GW generation capacity and Azure Power will develop 4 GW and supply power at Rs 2.92/unit.
As a part of the deal, the two companies will also build 3 GW of solar manufacturing capacities in the country (Adani 2 GW and Azure 1 GW).
To address the issue of solar projects not finding power buyers, the government is planning to bundle higher priced projects (including Adani and Azure’s Rs 2.92/unit bids) with the ones quoting lower tariffs in the recent auctions, and offer them to discoms at an average composite tariff.
Reference- Financial Express, Economic Times, Mercom India