| Experienced management and assured off-take through long-term power purchase agreement:
The Refex group is involved in the business of refrigerant gases, renewable energy utility-grade EPC projects, O&M of solar power plants, solar IPP businesses, ash disposal management, power trading, and coal trading. Refex group has commissioned 1 GW of projects under differing conditions in Tamil Nadu, Maharashtra, Gujarat, Uttar Pradesh, Andhra Pradesh, and Rajasthan. SRSSFPL has entered a 25-year PPA with South East Central Railways (SECR) at a fixed tariff of Rs. 2.91 per unit (kWh) of power supplied. This substantially mitigates the demand and price risk associated with the project. The PPA was signed in December, 2019, and the plant commenced its operations in April, 2023. Refex Renewables and Infrastructure Limited (Erstwhile SunEdison Infrastructure Limited), part of the Refex Group, will manage the O&M activity and EPC part of the solar plant, which will ensure efficient operational metrics of the company. Acuité believes that strong management, a long-term PPA, and strong counterparty receivable risk keeps the business risk profile moderate and stable over the medium term.
Strong counter-party profile
SRSSFPL has entered into a 25-year with South East Central Railways (SECR), a division of Indian Railways, at a fixed tariff of Rs. 2.91 per unit. SECR is key division of Indian Railways, which plays a crucial in the transportation of minerals and coal to different power plants and industrial units all over the country. The main commodities being transported are coal, iron and steel, iron ore, cement, and fertilisers. Railway Energy Management Company Limited (REMCL), on behalf of Railways, has invited proposals in a single stage bidding process for the execution of a 50 MW (AC) solar power plant for a period of 25 years. Acuité believes that the presence of a strong counterparty profile mitigates receivable risk and keeps the business risk profile moderate and stable over the medium term.
Presence of Escrow mechanism
The bank facilities availed by SRSSFPL are backed by a Debt Service Reserve Account (DSRA) in the form of a fixed deposit, equivalent to 1 quarters’ interest and principal for servicing the debt obligation. The company has currently created a partial DSRA of Rs.3.75Cr, with remaining balance expected to be built over the next 6 -9 months. In addition, the bank facilities are supported by a Trust and Retention account (TRA) through which all receipts from SECR shall be escrowed with priority for debt debt repayment. Besides, there is presence of a corporate guarantee from sponsor - Sherisha Technology Private Limited up to 3 years from COD of the project or 1 Quarter DSRA creation and project stabilization, whichever is later. Acuité believes that the lender derives comfort from the escrow mechanism in place, which facilitates timely repayment of the debt obligations over the medium term.
Moderation in PLF performance, expected to improve in coming quarters:
Power generation improved in FY2025 with total units generated at 8.93 core units and an average PLF of 21.25 percent, compared to 7.60 crore units and an average PLF of 17.60 percent in FY2024, reflecting improved operational performance. The average PLF during FY2025 remained below the P90 average of ~23 percent, due to a change in transmission frequency lines as per guidelines, which resulted in higher consumption by the reactor. During the current fiscal up to July 2025, the company has generated 2.87crore units with an average PLF of 21.01 percent. Generation levels are expected to improve in the near term due to recent addition in DC capacity and improvements in existing transmission frequency lines which were hindering the efficiencies in power generation.
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