SoftBank wants to pour a whopping $1 trillion in India, by 2030, to develop solar power projects here. In return, the Japanese conglomerate is reportedly demanding that electricity tariffs be fixed in dollars and wants the government to ensure that power produced at its plants will definitely be bought.
However, SoftBank may fail to secure any assurances from India, which still remembers the bitter aftertaste of the Enron-Dabhol debacle — the Centre may not want to expose state utilities to foreign exchange risks. And as for purchase guarantees, New Delhi prefers that sellers negotiate power purchase agreements (PPAs) with buyers, as is the industry practice.
SoftBank Group Corp has already agreed to roll out a $930 million Indian joint solar energy venture with Chinese firm GCL System Integration Technology Co as part of its India solar investment roadmap.
GCL will provide technology and SoftBank will assist in obtaining land and regulatory approvals.
India has set a target to achieve an operational solar power capacity of 100 GW by 2022, five times current levels, under Prime Minister Narendra Modi’s renewable energy strategy.
SoftBank and GCL’s new venture will eventually have a capacity of 4GW and will be implemented in two 2GW phases. The Japanese firm will hold 60 percent of the venture’s shares and GCL will own the remainder.