Sajjan Jindal-owned company plans to increase portfolio of renewable resources, raises $707 million via debut green bond issuance
JSW Energy Ltd, a power generation firm controlled by billionaire Sajjan Jindal, is embarking on a journey to turn its traditional thermal power-fired business into a renewable energy one. “We are a company in transition. Our origin is in coal-fired power generating stations, however, last year, we articulated a medium-term vision where we have charted out our path to grow our portfolio to 10,000 megawatts (MW) total capacity. We will increase our existing 4,600 MW to 10,000 MW, which is going to completely come from renewable sources,” says Pritesh Vinay, chief financial officer at JSW Energy Ltd. Vinay, who has worked with JSW Steel for nearly eight years, moved to his current role late last year.
According to the firm, it has nearly 4,600 MW of operational capacity of which nearly 3,000 MW is thermal power and 1,400 MW renewable energy. From its current mix of 70 percent assets in thermal power generation, it plans to swap the ratio in favour of renewable assets –wind and solar energy apart from its existing hydro assets.
In September 2020, the company, under its subsidiary JSW Future Energy Ltd, won a bid for blended wind capacity of 810 MW from Solar Energy Corporation of India Limited (SECI). On May 3, it managed to sign a power purchase agreement with SECI for the contracted capacity of 540 MW of the total 810 MW. In March, it added another 450 MW, which takes its under-construction portfolio to 1,260 MW.
“We have visibility of a pipeline of 1,100 MW of renewable projects that is under planning stage for meeting the group’s captive power requirement. This entire 2,600 MW is the immediate pipeline, which will get commissioned over the next 24-30 months,” adds Vinay. After installation of this new capacity over the next two-three years, the company’s portfolio will have around 55 percent of its capacity output through renewable assets. As per renewable purchase obligations (RPO) by corporates, the entire group’s requirement will be catered to by JSW Energy’s renewable capacity.
For the quarter ending December 2020, the company reported revenues of Rs 692 crore as compared to Rs 1,092 crore during the same period last year, a drop of 37 percent and it reported a net profit of Rs 35.12 crore. In a report released on January 30, Motilal Oswal Research said the company’s results reflect the impact of lower merchant sales volumes due to subdued merchant prices. However, this was partly offset by operational efficiency measures. At the consolidated level, Ebitda was down 5 percent on a year-on-year basis at Rs 600 crore. The company’s net debt stood at Rs 7,340 crore as against Rs 9,810 crore at the end of FY20.