Page 71 - PR COMMUNICATION AGE July - December 2020

height of COVID in April 2020 and develop that ecosystem from mobile apps because the issue was data
despite that all the top companies phones to smartphones to laptops to privacy, issue was national security,
have applied with commitment to tablets to IoT devices. India must issue was national sovereignty.
make mobile phones worth Rs 10 lakh become a huge centre of these
crore in the coming five years, of which equipment manufacturing," he said. Therefore, in any exposure of
Rs 7 lakh crore is for exports. companies, national security angle will
On participation of Chinese companies
also be taken, be it private or
"India is today the hub of mobile in offering their products in India,
government. As far as the relevant
manufacturing and this process is Prasad said it would not be prudent or
irreversible… India must become the desirable for him to take the name of financial routes are concerned, some
biggest manufacturing centre of any country except to highlight the changes have also taken place with
laptops, of machine-2-machine general policy initiative which the regard to countries having physical
equipment, of tablets etc. I want to country is following. "Yes, we banned adjacency with India," he said. R

Adani Green Energy's project has no guaranteed customer

Adani Green Energy's record $6 billion solar power project announced in June has no guaranteed customer, its deal
with India's main solar-adoption agency shows, and may expose the company to higher financial risk. Shares in the
firm, controlled by billionaire Gautam Adani, have soared three-fold since the signing of the 8 gigawatt (GW) multi-
plant deal, which Adani hailed as the "largest of its type, ever" and a landmark for India.
However, previously unreported details of the agreement between Adani Green and Solar Energy Corp of India Ltd
(SECI) reveal the agency has no "legal or financial obligation" to support the project if SECI fails to find buyers. This
would be the first major SECI project without a state-guaranteed Power Purchase Agreement (PPA), which analysts say
has been key to building up India's renewable energy sector.
When SECI floated the tender for the project in June 2019, it had said a PPA would be assured, but it withdrew the
clause guaranteeing purchase in the deal signed a year later. "There shall not be any legal or financial implication to
SECI in relation to such (unsold) quantum including associated quantum of manufacturing facilities," the agreement,
reviewed by Reuters, says.
Financing risk
Adani Green has said 2 GW of generation capacity will come onstream by 2022, while the rest will be added in annual
2GW increments through 2025 as a part of the agreement. There are no buyers lined up for the project yet and it is
unclear when SECI will be able to find buyers, a process that typically takes months. Auctions by the SECI usually attract
greater participation because of the assurance of power purchase and payments.
But the lack of such a guarantee could undermine investor and lender confidence, raising financing costs in a market
like India where power demand growth has repeatedly fallen short of expectations amid a broader economic slowdown.
The quality of "federal government-guaranteed contracts with cashflow payment certainty provide investors the
confidence to deploy tens of billions of dollars", said Tim Buckley, director at the Institute of Energy Economics and
Financial Analysis.

Adani Green has said it would receive interim funding for the project from a consortium of foreign banks, and later
with money raised from the capital markets. It has reassured investors of its ability to tap markets citing its sovereign
grade rating. It declined to comment on the project.
"We have full visibility and we would be in a position to inform the market shortly," the group's chief financial officer,
Jugeshinder Singh, said earlier this month. Adani Green aims to become the world's largest renewable energy company
by 2030. It has an installed renewable energy capacity of 2.8 GW and wants to increase that to 25 GW by 2025.

'Enough margin available'
Gautam Adani has said the latest project can make a profit at the power price of 2.92 rupees ($0.0393) per kilowatt
hour (kwh) agreed in the SECI tender. "At 2.92 rupees, there is enough margin available plus we also have time of 3-
5 years to implement this project," he said in June.

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