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The largesrt renewable Infrastructure investment trust (InvIT) will have the capacity to house a total of 4.1 GW.

Mumbai, NFAPost: To further fuel its growth ambition, Tata Poser is coming up with India’s largesrt renewable Infrastructure investment trust (InvIT) to further enhance its capability to meet capital expenditure.

Tata Power CEO & Managing Director Praveer Sinha said that he proposed Renewable InvIT, will be its growth engine going forward.

“At present, it has about 2.6 GW of operating plants and 1.5 GW of capacity in pipeline taking the total capacity to 4.1 GW,” said Sinha. This InvIT provides Tata Power with an option to recycle capital once the assets are operational,” said Tata Power CEO & Managing Director Praveer Sinha.

Further, Tata Power CEO & Managing Director Praveer Sinha said the InvIT strategy enables Tata Power to raise capital at lower cost post stabilisation of assets.

De-consolidate debt

“It will help grow the portfolio whilst we de-consolidate its debt. In its recent AGM, Chairman N Chandrasekaran said that it will look to bring down the debt to around Rs 25,000 crore,” said Tata Power CEO & Managing Director Praveer Sinha.

Apart from adding capacity in the renewable generation in the next five years, we will also be scaling the Solar Cells & Modules Manufacturing business along with the Solar EPC business, pointed out Sinha.

The company made these announcements on teh sidelines of its Q1 results. Tata Power reported a 10 per cent rise in consolidated profits for the June-ended quarter, on the back of strong cash generation and tight working capital. Profits came in at Rs 268 crore, compared to Rs 243 crore posted in Q1 FY20.

Lower power demand

However, revenues in the June-ended quarter dipped by 11.8 per cent to Rs 6,671 crore as compared to Rs 7,567 crore in the same period last year. The dip was due to a combination of factors which included lower power demand, delay in solar EPC businesses on account of COVID-19 and lower coal prices.

In the quarter, the Board also approved a scheme to merge Coastal Gujarat Power Limited (CGPL), TPSSL and Af-taab with the parent company. CGPL, the subsidiary which runs the Mundra ultra mega power plant, been a drag on the company’s finances and has already suffered large losses and is facing difficulty in financing its operations. In Mundra, Tata Power has invested Rs 24,000 crore.

Given the inordinate delay in resolution of the tariff matter, the merger will provide relief through direct support from the parent company. The Company continue to be in discussion with various state governments and state discoms. We do hope that the State Governments will take a practical view and resolve the PPA amendment issue in the interest of all stakeholders,” it said.

Solar EPC contract

In the June-ended quarter, Tata Power Solar received the Letter of Award for Solar EPC contract from NTPC for 300 MW solar project. With this order, the order book of Tata Power Solar stands at approximately Rs 8,700 crore including external and internal orders.

In Q1, Tata Power Renewable Energy Limited (TPREL) received a Letter Of Award (LOA) from Gujarat Urja Vikas Nigam Limited (GUVNL) to develop a 120 MW solar project in Gujarat and LOA from Maharashtra State Electricity Distribution Company Limited to develop a 100 MW solar project in Maharashtra.

Tata Power Green Energy Limited (TPGEL) also received the LOA from Mumbai Distribution to develop 225 MW Hybrid (solar and wind) Renewable Project. Tata Power has also recently won another bid of 370 MW for which formal LOA is awaited.

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