GAIL (India) Limited, India’s leading natural gas company, has invited expression of interest (EoI) to acquire operational solar power projects located in solar parks.

GAIL is exploring opportunities in the renewable energy sector with a target of 1,000 MW capacity. Against this backdrop, the natural gas company has invited EoI from promoters, independent power producers, and developers willing to offer a 100% or 50% equity stake in their operational solar projects located in solar parks.

The last date to submit the bids is August 3, 2021, and the EoI will be valid for three months from the date of its submission.

The minimum capacity of the solar project should be 50 MW, and it should be located at a single site.

The project must be owned and operated by a special purpose vehicle (SPV) registered in India. Interested parties must offer all the projects owned by the SPV in the solar parks. The SPV should not have any assets outside the solar parks.

The company has stated that the power purchase agreement (PPA) for the projects should be with NTPC or the NTPC Vidyut Vayapar Nigam Limited (NVVN), the Solar Energy Corporation of India (SECI), or any other central government agency.

As per the tender document, all projects should be in continuous operation for the last 12 months with a minimum of 95% plant availability on the date of bid submission.

Also, interested parties offering the operation and maintenance (O&M) services for the projects should continue to provide O&M services for at least two years at the existing terms and conditions from the date of signing of agreements for acquisition.

Interested parties offering the projects for acquisition should have at least a 50% equity share in the offered SPV owning the project.

If GAIL acquires 50% equity in the offered SPVs, the interested parties or the remaining shareholders, as the case may be, should maintain a 50% equity stake in those SPVs for at least one year from the date of GAIL becoming an equity partner in that SPV. After that, the interested parties and the remaining shareholders can sell their equity stake to a third party.

The company has also mentioned that the shortlisted parties would be asked to submit a comprehensive financial model and other details comprising returns through discounted cash flow for their offered SPVs within seven days from the date of shortlisting by GAIL. If a party offers more than one SPV, separate financial models are to be submitted for each offered SPV.

In November last year, GAIL invited bids for the appointment of a transaction advisor for evaluating merger and acquisition (M&A) opportunities in the renewable energy space. The scope of work included technical due diligence, legal due diligence, tax and accounting, financial due diligence, and M&A transaction advisory services for the potential transaction based on the information made available by the seller.

Earlier, GAIL had sought its shareholders’ approval to amend the company’s charter to start investing in solar power projects, various start-ups, and EV charging infrastructure across the country.

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