HSBC downgrades Azure Power because of uncertainty on solar PPA

• "Azure's bid for a 4 giga-watt (GW) renewable plus manufacturing plant won in October 2019 obtained exchanged a letter of award in June 2020 but still waits for a power purchase contract as state power distribution firms (discoms) remain financially stressed," HSBC stated.

Analysts at HSBC downgraded the rating of Azure Power to 'hold' from 'buy', as the government increasingly locates it tougher to locate purchasers of solar energy. "Azure's bid for a 4 giga-watt (GW) renewable plus manufacturing plant won in October 2019 got exchanged a letter of honor in June 2020 however still waits for a power purchase arrangement as state power distribution business (discoms) stay economically stressed," HSBC stated.

Azure's untied capacity belongs of the 12 GW projects granted in the maiden auction for the manufacturing-linked solar plan, whereby Adani Green Energy will construct 8 GW generation ability as well as Azure Power will certainly create 4 GW as well as supply power at Rs 2.92/ unit. As a part of the bargain, both business will likewise develop 3 GW of solar production abilities in the nation (Adani 2 GW and also Azure 1 GW). As FE lately reported, to resolve the problem of solar projects not locating power purchasers, the government is intending to bundle higher valued projects (including Adani and Azure's Rs 2.92/ system bids) with the ones pricing quote lower tariffs in the current public auctions, as well as use them to discoms at an average composite tariff.