Announcing the decision in its fourth quarterly report, Scatec cited a lack of supply of domestic solar panels and a 40% import duty on solar panels to be imposed from April as the reasons for putting the project on hold. Due to these, the project has been moved from backlog to pipeline, the developer stated, adding it still viewed India as a very robust market.
Scatec has a 50% stake in the Rajasthan solar project being developed by Acme. The project, its first in India, was scheduled for commissioning in 2022. It will benefit from a 25-year power purchase agreement (PPA) with the Solar Energy Corporation of India.
Scatec stated the main reason for putting the Rajasthan project in the pipeline was “the realization or confirmation that the import duty was not going to be lifted for some of the projects in that [it’s 900 MW project] category.”
It added, “There will be a change in the market in terms of where are the modules being sourced from, China or all the production being built up in India. We are a bit uncertain how quickly that is moving. That’s why we have decided to take this large project into the pipeline from the backlog.”
Also, “There is a gap in between the price level that we have seen in modules from China and the expected price level for India modules. We expect that over time, production lines for modules in India will approach the same cost level as in China. But that needs to be confirmed. Without knowing that, we have decided to move the project from backlog to pipeline.”
As shared by Scatec last year, the 900 MW solar project has an estimated total CAPEX of US$ 400 million, with 75% debt financing from an Indian state-owned lender. Scatec holds a 50% economic interest in the project, with Acme retaining the balance 50%.
Acme’s scope of work includes turnkey engineering, procurement, and construction (EPC) work. Scatec will ensure delivery as per international standards of Health, Safety, Security and Environment (HSSE) and Environment and Social (E&S), as well as optimization of engineering, procurement, and operations of the plants.
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