Speaking to CNBC-TV18, Anurag Mundra, Joint MD and CFO said that with this order the company has an orderbook of 40 MW and has made bids for 180 MW worth of projects.
Ujaas Energy has won an order for Rs 10 crore from Airport Authority of India (AAI).
The order is for grid connected and ground mounted solar photovoltaic power plant which is to be installed at the Jaipur airport.
Speaking to CNBC-TV18, Anurag Mundra, Joint MD and CFO said that with this order the company has an orderbook of 40 MW and has bid for another 180 MW worth of projects.
He further expects airports and sea ports to switch from conventional sources of energy to solar plants and plans to participate in more bids form AAI.
Below is the verbatim transcript of Anurag Mundra's interview with Reema Tendulkar & Nigel D'Souza on CNBC-TV18.
Nigel: Not a very large order but could you give us some details with regards to this and also what does this take your total orderbook to?
A: This Airport Authority of India (AAI) order -- you must be aware that AAI is planning to have solar power plants on all the major airports. Airports themselves are big power consumers and they also have a spare land to put up as a solar power plant. They also have substantially good amount of rooftops where a solar power plant can be put up. It is a first order that we got from AAI, it is the solar power plant which is coming in Jaipur. By this order, we have an orderbook position of around 40 megawatts and our bid book today is somewhere around 180 megawatts.
Reema: Are you in talks with the AAI for setting up more such solar plants in various other airports and if yes, could you give us some details?
A: The government of India or the AAI always follow a tendering process. So this order also from the Jaipur airport, have floated a tender we had bid and won the bid. Similarly, there are some more bids which are already coming in. So we have to participate in those bids and win those bids to get those orders.
Reema: Which are these bids which are currently open or are likely to open soon?
A: Bhubaneshwar is open but gradually in a year's time, all the major airports of country will have a solar power plant.
Nigel: In all these airports individually the order size can vary or was it likely to be this Rs 10 crore?
A: It varies airport to airport depending upon the available land over there. So it is not only the airport also but the major sea port is also planning to have solar power plant on the spare land and the rooftop they have.
So, it is a combined total effort and the same is being reflected in the industry how we are going to be a 100 gigawatt country from the presently 5 gigawatt country. So, every step is counting and though the number may say 1.8 megawatt, it looks like a small number but the small numbers are adding up and making it big and I am sure that in next five-seven years, as a country we will achieve the target of 100 gigawatt.
Reema: On this particular order, what could be the potential realisation?
A: It is an order of around Rs 10.3 crore for 1.8 megawatt. This is the total revenue we will be getting and typically, this EPC business where the turnkey contract has been given, the margins are somewhere between 9 percent and 11 percent.
Nigel: That is lower than the margins that you are currently enjoying of around 21 percent. That is at least what you reported in last quarter?
A: Yes, but even if you look at the last quarter's numbers where the major revenue is coming from this segment, EPC segment of business, the revenue is in the line of what I said, 10-12 percent or 9-11 percent.
Nigel: The next big talking factor and the big focus for the markets currently is Budget. What are the wants that you would like to see our finance minister deliver, what are the expectations, do you expect solar parks to be treated on par with SEZ, is that on your wish list and also what would be others that are on your wish-list?
A: As an industry, we have one very big wish-list. It is the enforcement of RPOs -- the demand of solar power is coming because of the renewable purchase obligation (RPO). Now, government has came up with a scheme like UDAY which motivates the obligating agencies to fulfil their RPOs. So we are expecting some more monetary or non-monetary incentive, which will force or motivate the obligating agencies to fulfil their RPOs. These are the major incentives we are looking at.
Second incentive we are looking at is today all must be aware that the cost of power generated from solar power is touching new low and it is mainly coming because of the low capital coming from the foreign countries where the rate of interest or the cost of capital is very low. In some European countries, it is less than zero. It is going to negative. However, the Indian power producer is still paying somewhere between 10 percent and 14 percent cost of capital. We are looking for some mechanism by which the cost of capital to Indian solar power producers can go down.
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