Tata Power to invest Rs 1,500 cr in renewables
February 9th, 2014

Tata Power plans to keep up with its annual investment of Rs 1,500 crore in renewable energy, even as the company’s net worth is being eroded by its flagship coal-based project inMundra.

“We have a lot of support from the board of directors when it comes to our renewable energy plans. So, I am sure we will get the equity required from them,” said Rahul Shah, chief of business development and renewables at Tata Power.

The company had been under the cloud of Mundra, which became financially unviable after Indonesia changed its coal export laws. The 4,000-megawatt (Mw) imported-coal based project has been eating into the balance sheet of the company, as it has already taken impairment losses of around Rs 2,500 crore.

Tata Power would require around Rs 400-450 crore of annual equity for expanding its renewables capacity. The company plans to add as much as 150-200 Mw of wind and 30 Mw of solar capacity every year. The company, which has a total capacity of 8,521 Mw, produces 500 Mw from renewable sources.

The company has also decided to house its renewable energy projects into a new special purpose vehicle (SPV). “We have 375 Mw of old capacity in Tata Power’s books. But the rest is part of the new project,” said Shah.

The company has plans to monetise the SPV to raise its own equity. “But the equity raising plans is two years away, which is when we will reach a critical mass,” said Shah.

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Source: BS

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