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Blupine Energy - Investment Decisions for Greenfield Solar Projects
內容大綱
In October 2021, Ashish Agarwal, vice-president of the solar business vertical at Blupine Energy Pvt. Ltd., was preparing for an upcoming tender for a 300 megawatt solar project. Relying on his industry experience, Agarwal noted all the assumptions related to the capital and operating expenses for setting up this plant. He wanted to compute a tariff that he could bid that would be competitive while generating a 16 per cent equity internal rate of return—the minimum Blupine required for greenfield projects. Agarwal knew the most critical project risks were a delay in arranging the required land and module price fluctuations, so he wanted to also consider their effect on the rate of return.
學習目標
This case is suitable for the capital budgeting section of an introductory finance course, infrastructure financing course, or project appraisal course at the postgraduate or working executive level. Students can achieve the following objectives: <ul><li>Understand the landscape within which a solar power generation company operates in India, the company’s relationship with other players in the power sector, and the risks the company faces in setting up a greenfield plant.</li><li>Prepare a projected profit and loss statement and a loan repayment schedule.</li><li>Apply the concept of depreciation in the context of books of accounts and income tax purposes using straight line method and written-down values.</li><li>Forecast the cash flows to the equity holder(s) and calculate equity internal rate of return.</li><li>Examine the effect of a delay in project commissioning and an increase in project cost on equity internal rate of return in a capital-intensive business like a solar power generation company.</li></ul>