Tata Power to create separate renewable business to build robust portfolio

Alexander Richter 14 Feb 2013

Indian news report that energy company Tata Power Company Ltd has created a special purpose vehicle to build a robust renewables portfolio.

The company plans to invest up to Rs 4,500 crore ($800 million) in the next three years in the SPV, said Rahul Shah, Chief-Business Development, India Business and Renewables of Tata Power.

The company to be called  Tata Power Renewable Energy Ltd plans an IPO or might be looking for an equity partner  within the next 3 to 5 year time frame.

Tata Power plans that all new renewable capacity projects would be then bundled under the new entity, while existing projects are to remain with the parent company.

While the company has mostly invested in wind and expects to invest in solar power. The company also has some stake in geothermal projects and companies. Tata Power is part of a JV with Australian Origin Energy and Supraco in Indonesia for the Sorik Marapi project and has some investment in Australian Geodynamics.

Shah said that the company would spend Rs 1,250 crore in 2013-14 to add additional capacity in renewable portfolio. A similar investment every year is projected for the next three years. The funding is to be made through 70 per cent debt and remaining equity.

Tata Power, or its new Renewable spin-off is eyeing renewable projects globally with the situation on regulation and bankable off-taking markets determining the direction the company will take accessing different markets globally.

Source: The Hindu Business Online