MUMBAI, May 19 (Reuters) - India's Azure Power, a grid-connected solar power generator, aims to build 100 MW worth of solar-based power plants in the next three years, with a total capex of about 15 billion rupees, a top official said on Wednesday.
The New-Delhi-based firm, which raised $10 million from World Bank arm International Finance Corp in March, expects to float an initial public offering, Chief Executive Officer Inderpreet Wadhwa told Reuters, but did not set any timeline.
"The intention is to approach the public markets, when the time is right," he said over the telephone.
Azure Power, part-funded by venture capitalists Helion Venture Partners and Foundation Capital, may opt for further fund raising in the medium term, he said.
"I think we are very well capitalised at this point, but I can certainly expect another round in may be 18-20 months."
The firm has a running grid connected 1 MW solar photovoltaic plant in the north Indian state of Punjab and is expanding it by another megawatt. It is also in the process of setting up a 15 MW power plant in the western state of Gujarat by November 2011.
India, whose grid-connected solar power capacity is close to 3 MW, recently launched its solar policy framework, National Solar Mission, that aims to increase it by more than 300 times to 1,000 MW by 2013 and by more than 1,000 times to 4,000 MW by 2017
"There is a enough potential and there is enough demand and there is enough investment available out there to get to the numbers that India is talking about," Wadhwa said.
European countries like Italy have added 800 MW solar power projects in just 12 months, while Germany has added 3,000 MW in a short period, and India can also achieve a similar feat, provided policies are supported by vigorous efforts, he added.
"For the entire sector to happen, there is a lot more effort and initiative required beyond policy and I believe all that is coming together now."
The main challenge of higher capex for solar technology is not preventing companies like Azure Power from going ahead as costs are falling slowly and also India has set up a differential tariff regime for solar power to make it more attractive.
"The first project we actually did was about 19 crores (190 million rupees per MW), the second project we are doing is about 17 crores (170 million rupees per MW), and we expect that prices would continue to decline," to about 150 million rupees per MW over couple of years, he said.
The firm is selling the entire power it produces at its Punjab plant to the state-run utility under a 30-year agreement, which will yield 15 rupees per unit for the first 10 years to the firm and 8.93 rupees per unit for next 20 years, he said.
The 15 MW Gujarat project, in partnership with U.S.-based SunEdison, has a 25-year contract with Gujarat state-run utility to offload its power at 15 rupees per unit for 12 years and 5 rupees per unit for the remaining period, he added.
The firm is also looking to set up projects in other states like Karnataka, Maharashtra, Rajasthan and Harayana and would also consider getting into solar-thermal power generation - where solar heated steam is fed into turbines - after couple of years, he said. (Editing by Sunil Nair)