Rating of ICRA B- assigned to bank lines of Khaya Solar Projects Private Limited

Khaya Solar Projects Private Limited

Instrument Amount Rating In Crore As on February 13
Term Loans 54.20 [ICRA]B- assigned

ICRA has assigned a rating of [ICRA]B- (pronounced ICRA B minus) to the Rs 54.20 crores* term loans of Khaya Solar Projects Private Limited. † The rating is constrained by sub-optimal levels of plant load factor during the initial six months (Jan-June 2012) due to delay in construction of transmission line; this adversely impacted generation in the key months of Mar-May and the cash flows of the company in FY13. The ratings are also constrained by significant technical risks arising from the limited track record of utility scale solar power projects in India and absence of adequate technical performance record of imported equipments like trackers and inverters in Indian conditions. Further, solar photovoltaic projects have relatively high capital cost/MW which makes their power uncompetitive vis-à-vis other conventional power sources. Under this circumstance, ability and willingness of off takers to pay such tariffs will remain a key rating driver. KSPL has signed power purchase agreement (PPA) with NTPC Vidyut Vyapar Nigam Limited (NVVN) which offers an adequate feed in tariff of Rs. 11.5 per unit for 25 years. However, the above weaknesses are tempered by the successful commissioning of the company’s 5 MW solar power project at Rajasthan. ICRA also takes note of sound management team of the Lanco Group, with an established track record in solar power industry. Going forward, the ability of the company to meet the designed performance parameters and secure timely collection from NVVN will remain the key rating drivers.

Company Profile
Khaya Solar Projects Private Limited (KSPL) is an SPV, promoted by Lanco Solar Energy Private Limited (LSEPL, 100% subsidiary of Lanco Infratech Limited) for setting up 5MW solar power plant in the state of Rajasthan. The project has been set up under centre’s Jawaharlal Nehru National Solar Policy with NTPC Vidyut Vyapaar Nigam Ltd (NVVN) being the designated nodal agency to implement the policy framework. The SPV has entered into a 25 year PPA with NVVN. The feed in tariff is Rs. 11.5 per unit for entire term of the agreement of 25 years. The construction was completed in January 2012, however the full scale operations commenced in June 2012 as there was a delay in completion of transmission line by Rajasthan Rajya Vidyut Prasaran Nigam Limited (RRVPNL). The total project cost was Rs 82.2 crores which was funded in a debt- equity Ratio of 2:1. February 2013

For further details please contact:
Analyst Contacts: Mr. Sabyasachi Majumdar (Tel No. +91-124-4545304) sabyasachi@icraindia.com
Relationship Contacts: Mr. Vivek Mathur, (Tel. No. +91-124-4545310) vivek@icraindia.com

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