Risk Analysis

Offtaker risk Mitigation
Bankrupcy Large Public Listed company/government
Reneg of contract OR Strong Penalty and termination clause
Termination of contract Legal Protection
Bad Publicity
CSR obligation fullfillment
Already getting power 20% lower than grid
Investor payment risk Mitigation
Termination of Contract Legal Protection
Plant shutdown Deemed generation provision
Generation lower than guaranteed Strong clause. Deemed generation protection
Force Majeure and Breakdown Mitigation
Plant breakdown Panel 25 year and other component standard warranties
Natural disaster Insurance
Damage and theft Loss of profit protection and MTB protection
Govt Policy Risk Mitigation
Govt changes stance to Renewable Highly unlikely as there is enough shortage of power
There is enough losses in discoms that can only be solved through cheaper renewable energy development by government policy
Government Reneg on policy (Gujarat state v/s investors) in supreme court is enough proof that this is not possible.
Offtaker Mgmt decision changes Mitigation
Offtaker demands lower rates Termination clause and penalty claim
Legal proceedings
Accept lower rates. IRR reduces by 1-2%
Find another PPA and Offtakers
Supply power at APPC rates currently at Rs. 3.2 /Wp
Contract dispute with Offtaker Mitigation
Offtaker does not want solar plant Termination clause and penalty claim
Provision in contract for plant relocation elsewhere
Find another PPA and Offtakers
Performance Issues Mitigation
Plant not performing well Thorough technical due diligence at plant design and initial construction level
Performance ratio protection through legal documentation and contracts
O&M contractual obligation for Performance ratio garuntee through linkage to O&M fees
O&M contractor does not perform duties Contractually obligated to pay penalties or ensure termination
Change O&M contractor – several professional standard contractors available