Adani Green plans ₹10,000-cr capex this year to build wind, solar plants

M Ramesh Chennai | Updated on May 04, 2020 Published on May 04, 2020

Adani Green Energy Ltd, one of India’s leading renewable energy companies, expects to spend ₹ 8,000 crore and ₹10,000 crore in the current financial year, to build between 1,100 MW and 1,500 MW of wind and solar power plants, the company’s CEO, Jayant Parimal, said in a conference call today.

Roughly ₹7,000 crore of this will be financed by debt raised from domestic lenders, he said, hinting that when the projects are completed and have an operating track record, the debt could possibly be refinanced through a green bond issue.

Equity is not a problem, because Adani Green is rich with $510 million it received from TOTAL Solar Singapore Pte for its 50 per cent stake in a joint venture, into which Adani Green has transferred 2,148 MW of solar assets.

Adani Green is building 3,445 MW of wind, solar and hybrid plants (1,280 MW, 475 MW, and 1,690 MW, respectively), which will add to its existing portfolio of 2,545 MW — including the 2,148 MW under the JV with TOTAL.

Solar modules

Like all other solar power developers, Adani Green buys solar modules from China — the modules produced by the group company, Adani Solar, are used in those projects where the use of locally-made modules is mandatory. Asked if the Covid-19 crisis had disrupted module supplies, Parimal said there were some supply disruptions between mid-January and mid-March, but Adani Green had faced only a limited impact because it did not have too many projects under construction at that time. However, now, while the Chinese factories are working full steam, Indian companies are in the lockdown period.

Due to the normalisation of supply in China but lack of demand in the world, there is a glut in the solar modules market. Modules are available today at 19-20 US dollar cents, Parimal said.

Year in retrospect

In 2019-20, Adani Green sold 4,373 million units of electricity and earned ₹2,065 crore from power sales. This works out to a realisation of ₹4.72 a kWhr. However, while the units sold increased 13 per cent, revenue rose by 8 per cent, reflecting lower tariffs for sales of power from recently-completed projects.

The company earned ₹2,549 crore from operations and made a loss of ₹68 crore, compared with loss of ₹475 crore in the previous year. This improvement was aided by a change in the method of calculating depreciation, from written-down-value to straight-line. The change resulted in lower depreciation charges of ₹394 crore, compared with ₹1,062 crore in the previous year. In an earlier conversation, Parimal defended the move stressing that the new method was more in line with the industry practice, whereas the earlier WDV method had been “far too aggressive”.

Net profit would have been higher but for two exceptional items — ₹173 crore one-time expenditure incurred on account of pre-payment charges to banks when the company re-financed its rupee loans, and ₹19 crore loss it sustained when it sold a project in the US.

In the last quarter of 2019-20, Adani Green earned revenues of ₹696 crore, 2 per cent more than in the corresponding quarter of the previous year, on which it made a net profit of ₹56 crore, compared with net loss of ₹94 crore.

Dues from discoms

Parimal said that all electricity distribution companies, with the exception of those in Andhra Pradesh and Tamil Nadu, had been paying their dues to the company on time. While Adani Green is now owed much by Andhra Pradesh, it still has to get ₹440 crore from Tamil Nadu — after the State paid the company ₹200 crore on the last day of 2019-20.

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Published on May 04, 2020
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