Termed as the largest single deal in the energy sector, Welspun's solar power project in Neemuch, due to its uniqueness, was chosen as the first investment by General Electric (GE) and has been completed in record time. For GE, the project was a stepping stone, as the project is its first foray into the Indian solar space.
About the project
The Neemuch project is one of the world's largest solar power projects. Its financial closing was the largest single deal in the energy and infrastructure space in 2012. Through a consortium of leading financial institutions, Welspun Renewables Energy Pvt Ltd (WREPL) had secured long term project funding of Rs 885 crore. Very few clean energy projects of this scale have been oversubscribed by 1.3 times. In fact, the uniqueness of the Neemuch Project attracted General Electric (GE) to invest into the Indian solar space. GE chose this project as its first investment. The quality of the project and the management can be gauged by the attractive valuation that GE assigned to the project. It is pertinent to note that the deal was completed in record time and the confidence of the investor in the venture can be assessed by the fact that signing to closure or subscription took relatively few days.
Committed timelines & appraised cost
WREPL demonstrates a consistent quality of building every project ahead of schedule and without any cost overruns. This has been much appreciated by the lending fraternity. Like other projects before, the Neemuch project also was commissioned ahead of schedule. The company's team of senior and experienced professionals ensured that the project was completed eight months ahead of schedule.
Timely debt servicing
Post execution, the next major milestone desired by the lenders was timely debt servicing. Adhering to Welspun's track record, post commissioning of the Neemuch project, there hasn't been a single day of delay in debt servicing. To avoid any delays, the company has taken two key steps:
Low risk investment
The projects built by WREPL are considered low risk investment due to a host of reasons. As an organisation, the company has developed its capability based on multiple operational levels. Here are some other salient points:
The above three factors ensure repeat dealings with existing banks and timely financial closure by boosting the confidence of the lenders. Please see table above for recent examples of financial closures of the company's projects and important milestones achieved thereof.
Creating a niche in solar energy
It is in WREPL's DNA to deliver maximum value for stakeholders by building benchmark projects within committed parameters. In this nascent solar industry, the company has commissioned some of the largest projects in the country.
Irrespective of size, each power plant has set standards. WREPL has carved out a niche for itself in the industry and therefore has been able to mobilise requisite funds to build its projects. Irrespective of strained market conditions, the company has won the support from key stakeholders - banks and other financial institutions.