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State-run NTPC is exploring avenues to raise around ₹2,000 crore this fiscal by monetising its renewable energy (RE) assets, which will be parked under NTPC Green Energy (NGEL). The country’s largest power generator has already launched road shows for investors.
Sources said that NTPC and NTPC Renewable Energy (NREL) have a total of 15 RE projects with a capacity of 2,861 megawatts (MW), which will be transferred to NGEL. NREL itself will become a step-down subsidiary of NGEL.
“NTPC plans to monetise its RE assets by approaching private equity funds and strategic investors for raising around ₹2,000 crore this fiscal. The IPO plans will be firmed up subsequent to this fund raise. NTPC has started road shows and is approaching interested parties,” a source said.
After all assets are transferred to NGEL, the entity will become the main vehicle for NTPC’s clean energy initiative. All future joint ventures will be formed under NGEL. A senior Power Ministry official said that in future NGEL will become as big as NTPC itself.
The activities are part of the company’s clean energy transition. By 2032, NTPC intends to have 60 gigawatts (GW) through RE sources constituting 50 per cent of its overall power generation capacity.
RE expansion
According to a report by ICICI Securities, NTPC, which accounts for 17 per cent of India’s total installed capacity with 23 per cent generation share, is increasing its presence in the renewable segment.
The company expects to spend around 40 per cent of total capex planned for FY22 and FY23 on RE projects. This share will increase further from FY25, which indicates very strong addition in RE portfolio from FY24 onwards, the brokerage added.
Besides, NTPC has also started making in-roads in other avenues of green energy like hydrogen. It has awarded the project of ‘Standalone Fuel-Cell based Micro-grid with hydrogen production using electrolyser’ at NTPC Simhadri.
On the other hand, the company recently issued tenders and has invited online bids from electrolyser technology providers, with whom the company intends to participate in upcoming tenders on green hydrogen, ICICI Securities said.
NTPC’s RE journey
NTPC began its foray in the RE sector in 2004 through distributed generation projects for remote villages for which grid supply was either technically not feasible or commercially not viable. On the announcement of the National Solar Missionin 2010, NTPC implemented eight solar projects of 105 MW by FY16 and one wind project of 50 MW.
To take up bigger solar projects under competitive bidding regime and implement in a short period of time, it was envisaged that a separate company be formed exclusively for RE business. On May 9, 2020, NTPC Board approved the formation of a new subsidiary and on October 7, 2020, NREL was registered with the registrar of companies.
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