Madhumita Mookerji

Kolkata: Webel Solar Energy Systems, manufacturer of solar voltaic cells, will invest Rs 300 crore for capacity expansion. It is setting up a greenfield plant at the Falta special economic zone in West Bengal for an additional 90 mw of renewable energy.

Investments will happen in two phases till 2009. About Rs 60 crore of the Rs 180 crore to be injected in the first phase has been raised, while debt will finance the balance. The Rs 120 crore, to be invested in the second phase, will be funded through internal accruals and debt in a 1:1 ratio.

The company currently has an installed capacity of 10 mw. The additional capacity will be channelled into exports since there is hardly a domestic market to speak of.

The company has also secured supplies of the critical input, silicon, which is in short supply globally. The solar energy market is valued at Rs 60,000 crore and growing in the face of sustained increase in the prices of crude.Webel Solar’s share in the world market is less than 1% but 95% of its revenues are contributed by exports to the US, Europe and Japan - where concern for the environment is high.

Vinay Ajitsaria, chief financial officer, Webel Solar, told DNA Money, “India currently requires solar energy for rural electrification. But, in a few years, it will be a signatory to the Kyoto Protocol, when it will have to meet 10% of its power requirements through renewable energy.”

He said,“We may look at the domestic market by 2010-11 if it expands.”

The company is the second-largest solar panel manufacturer in India after Tata BP and feels there has been no proper thrust to the domestic market so far.

Recently, the West Bengal state electricity board formed a green energy development corporation to promote the use of renewable energy through solar plants.

According to a recent state government notification, solar plants that hook up with the grid will get Rs 11 subsidy per unit, says Ajitsaria.

Said an industry analyst, “Low barriers to entry, restricted presence in the value chain and over-dependence on exports could restrict Webel Solar’s price earning (PE) multiple.”

Source : DNA