NHPC Board Approves Foray Into Solar Energy Business

State-run hydro power giant NHPC has announced that its board has approved the proposal to foray into the solar energy business.

State-run hydro power giant NHPC has announced that its board has approved the proposal to foray into the solar energy business. The firm is mainly into hydropower generation.

“It is to inform that board of directors of NHPC Ltd in its meeting held today…has considered and approved the proposal regarding diversification of business of the company by the development of solar power projects as intermediary procurer through solar power developers,” a statement said.

In April, we had reported on five firms that had been declared as winners in the auctions for the 2 GW interstate transmission system (ISTS) connected solar projects tender by NHPC. SoftBank-backed SB Energy, Axis Energy Ventures India, O2 Power, EDEN Renewables, and Avaada Energy were the five winners.

SB Energy, Axis Energy EDEN and O2 Power all quoted the identical L1 tariff of Rs 2.55/kWh in the auction, with each being awarded the full quoted capacities they had submitted proposals for under the tender. SB Energy won rights to develop 600 MW solar projects, Axis Energy won 400 MW capacity, EDEN Renewables won 300 MW and O2 Power won 380 MW capacity. Avaada Energy which quoted a tariff of Rs 2.56/kWh was awarded 320 MW capacity. The firm had submitted a proposal for 600 MW capacity, however, based on the bucket filling method, it was only awarded 320 MW capacity.

The tender had received technical bid submission worth 3.78 GW after nine developers including ReNew Power, Tata Power and AMP Solar, had submitted bids.

More recently, the firm had announced that it had raised Rs 750 crore through the private placement of bonds at a very competitive interest rate of 6.80 percent per annum. Further, the company has raised the loan amount for a period of 10 years. Its coupon rate is 6.80 percent, which is lowest in the current fiscal and lower by 30 bps or 0.30 percent than the prevailing AAA rated 10 years Bonds at 7.10 percent, the company said in a statement.

NHPC presently has an installation base of 7,071.2 MW from 24 power stations on ownership basis including projects taken up in joint ventures. And based on its recent dealings the firm is well and truly ready to enter the solar energy segment.