We have been asked by many investors about the AP solar bid. The RFS document has lack of clarity in terms of PPA signing, transferring/sale of the plant, allocation to L1, L2, etc. we have tried to put some of these issues as per the details provided in the bid document. We will appreciate if some more questions can be thrown to us in the similar lines.
1. The participated entity name is A (group entity of solar bidder) identified as L1 and asked to sign a PPA after issuance of an LoI, can the bidder(Entity A) hive off an SPV(incorporate a separate legal Entity B) for signing a PPA after it was found as a successful bidder??
Reply: The RfS is not giving any clear clause for the formation of SPV but the Format 6.13 for CPBG and The Checklist for Submission of Documents before Signing PPA indicates that the documents can be signed in the name of SPV after issuance of LOI.
2. Transfer of asset/Company /Dilution of % Equity Share holding – Is allowable after identified as a successful bidder , any specific time frame (say XX years from CoD, etc) if incase allowable
Reply: Yes it is allowable. But for the project company incorporated shall have the same share holding pattern as given at the time of RfS and this shall not change till the signing of PPA and the controlling shareholding held by the lead member (holding more than 50% of the voting rights and paid up share capital inclusive of fully, compulsorily, mandatorily, convertible Preference share/Debentures in the Company/Consortium) shall not change from the date of submission of RfS up to one year after the COD of the project. For more information please refer clause no 3.5 B (iv) on page no 24 of RfS.
3. Reference clause 3.7 c), page no.29 – For an identified location(Substation) lets say 3 bidders (Entity A, B & C) submitted/placed the bids and identified as L1 , L2 & L3 respectively and the feasible capacity is 15 MW (at the identified132 kV Sub-station), How is the capacity allocation done ??
Reply: In this case, 1 MW will be allotted to L1. Now the remaining capacity is of 14 MW. So 5 MW will be allotted to L2, provided L2 matches the price of L1. Now the remaining capacity is 9 MW which will be allotted to L3, provided L3 matches with the price of L1. So whosoever matches with the price of L1 will be allotted their quoted capacity as per availability and the planned aggregate capacity of project at the specific site.