Chennai-based energy firm Shriram EPC, has been awarded an Rs70 crore turnkey contract for setting up a 15 MW wind farm in Tirunelveli district, by Cape Energy, an associate of US-based Berggruen Holdings (BHI), a PE funded company with interests in infrastructure and real estate in India.
The contract involves supply of 60 units of 250 KW wind turbines, procurement of turbine operation licenses, commissioning of turbines, civil work, grid connectivity, and a yearlong operation and maintenance of the turbines. The project is to be completed by end of April.
According to EPC’s CEO and MD T Shivaram, the increase in wind power tariff rates in TN from Rs2.90 to Rs3.40, and a 1% decrease in interest rates, combined with a reduction in raw material prices has translated into a 3-4% improvement in project internal rate of return (IRR) and 13-14% in equity rate of return.
However on the flip side, currency fluctuations have affected the firm as they imported approximately 20% of their components.
He was however optimistic about his company’s wind turbines vertical as the market is seen as opening up for the sector, after a series of tariff and policy related issues, and the onset of the economic downturn which have ensured that companies that have invested in renewable energy were there for the long term. Wind turbines vertical comprises Rs100 crore of the company’s total turnover of Rs700 crore.
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