The company, which is into power generation, transmission and distribution, will not be adding any new coal-based thermal power capacity
Tata Power is set to invest Rs 60,000 crore over the next three years, with nearly half of the investment directed towards the renewables sector, according to a top executive.
The company, engaged in power generation, transmission, and distribution, has no plans to expand its coal-based thermal power capacity, confirmed CEO and Managing Director Praveer Sinha. Tata Power aims to invest up to Rs 15,000 crore in the fiscal year 2024, increasing it to Rs 20,000 crore in FY25, Rs 22,000 crore in FY26, and Rs 23,000 crore in FY27, bringing the total capital expenditure to Rs 60,000 crore by FY27.
In addition to the previously announced 2,800 MW hydel pumped storage projects (PSP) with an investment of Rs 13,000 crore, the company has identified three additional sites, Potalpali, Kataldhara, and Nenavali in the Raigad district, for similar projects potentially generating up to 9,000 MW of power.
Sinha emphasised the financial advantages of brownfield expansions like PSPs, with an investment of around Rs 5 crore per megawatt, leveraging existing assets for increased power production. The company has not signed power-purchase agreements for two PSPs, but Sinha hinted at bundling them with solar and wind capacity to facilitate fundraising.
Tata Power plans to commission the 1,000 MW PSP by the end of 2027 and the Shirwata plant (1,800 MW) shortly afterward. CFO Sanjeev Churiwala stated that the company's finances are sound, with net debt at Rs 35,328 crore as of the end of FY23. Funding for investments will be sourced with 70 percent debt and the remaining equity.
The company aims to double its revenues and profits over the next four years with these new investments. Regarding the Trombay generating capacity in Mumbai, Sinha mentioned ongoing discussions with the government and electricity regulator to determine the future of the 500 MW coal-fired plant after the current deadline for closure in March 2024.
Tata Power's stock closed 4.88 percent higher at Rs 270.75 on the BSE on Tuesday, outperforming the benchmark gains of 0.31 percent.