ACEN, UPC reach financial close for Indian solar project

MANILA, Philippines — The Ayala group and its partner have achieved financial close for their 100-megawatt (MW) solar project in India, which is expected to finish within the first half of the year.

UPC-AC Energy Solar – a joint venture between AC Energy and Infrastructure Corp. and UPC Solar Asia Pacific – secured a 20-year loan from the US International Development Finance Corp. (DFC) for the Sitara Solar Farm, to be funded through a 75:25 debt-to-equity financing scheme.

Located in Rajasthan, a desert state with the highest irradiation in India, Sitara Solar has an estimated project cost of $67 million.

The construction of the solar farm started last year and is expected to start its power generation by the first half of the year.

“We are very thrilled with this financial close during the current challenging environment, where we were able to meet DFC’s high standards for environmental and social compliances,” said Pranab Kumar Sarmah, CEO of UPC-AC Energy Solar and co-founder of UPC Solar Asia Pacific.

In March 2019, UPC-AC Energy Solar won the power supply agreement for the 100 MW solar project via a competitive bid at INR 2.48 per kilowatt-hour (kWh), fixed over a 25-year period.

Sitara Solar will supply energy to the government-owned Solar Energy Corp. of India (SECI), which facilitates the purchase and resale of electricity of solar projects to the benefit of the distribution companies across various states. SECI received a credit rating of AA+ from ICRA Ltd. in January 2021.

“This project is poised to enhance renewable power supply in India. We had faced many unexpected headwinds due to the COVID-19 pandemic. Thanks to the immense hardwork of the highly motivated and capable teams from all parties involved who worked shoulder-to-shoulder to make this transaction happen,” Sarmah said.

As one of the fastest growing economies in the world, India ranks third globally in terms of its 2020 renewable energy investments and plans, and foresees its electricity consumption jumping to 15,280 terawatt-hours (TWh) in 2040. As of November 2020, India’s installed renewables capacity stands at 90.39 GW, with 36.91 GW coming from solar.

This project milestone is the latest in AC Energy’s string of initiatives to sustain its growth momentum and expand its renewables capacity in the Asia Pacific region.

“We are well-positioned to establish a meaningful presence in India and contribute to the country’s renewable energy goals, bringing a total of 450 MW of solar projects under construction and in the pipeline with our partner, UPC Renewables,” AC Energy International COO Patrice Clausse said.

“These sustainable developments highlight our commitment to support the country’s aim to source over 60 percent of energy capacity from renewable sources in 10 years,” he said.

Meanwhile, the financial close is the first major milestone for UPC-AC Energy Solar as it targets to achieve more than one gigawatt (GW) of solar energy portfolio across Asia.

“We are pleased to complete financial close of another large solar energy project in the Asia Pacific region with our partner, AC Energy, in the recent weeks. We aim to contribute significant portion of AC Energy’s 2025 renewable energy capacity targets from our projects under development and construction in this region,” UPC Renewables chairman Brian Caffyn said.

UPC-AC Energy Solar is a 50-50 joint venture company between ACEIC through AC Renewables International Pte. Ltd. and UPC Renewables through UPC Solar Asia Pacific Limited for the development, construction and operations of solar projects in the Asia Pacific region.