In spite of having secured the rights to develop a 500 MW solar power project at the lowest-ever tariff in India, global renewable energy project developer SunEdison is confident of healthy returns from the project.

SunEdison successfully bid for the entire 500 MW solar power tender issued by NTPC Limited. The company will set up the project in the southern Indian state of Andhra Pradesh, and the power generated from the project will be acquired by NTPC Limited, which it will pool with power generated from its own thermal power plants to effectively reduce the overall cost of power for end users.

The fact that a state-owned company that also happens to be the largest power generation company in India will be buying power from the project has increased SunEdison’s confidence in the project. SunEdison believes that having NTPC Limited as part of the project will help it secure debt finance at 50 basis points lower than market norm.

SunEdison had secured the project at a record-breaking tariff of 4.63 per kWh, beating several leading project developers, including.

The bid by SunEdison is at a 34% discount to the tariff determined by the Central Electricity Regulatory Commission for the current financial year. While SunEdison will be paid Rs 4.63/kWh (US¢7.12/kWh), the utilities will be buying this solar power bundled with power from coal-based power plants. The utilities will thus pay just Rs 3.50/kWh (US¢5.38/kWh).

SunEdison has been in news lately due to its decision to sell 425 MW of solar power assets in India to yieldco TerraForm Global for $231 million. SunEdison had earlier this year pledged to set up 15.2 GW solar and wind energy capacity in India.