Orient Cement Goes With AMP Energy For Captive Renewable Generation

Orient Cement, which has plants in Maharashtra, Telangana and Karnataka,has signed up for a 26 percent stake in AMP Solar Systems, a step down subsidiary of AMP Solar Technology. The new firm, which was incorporated in May 2020, will set up a solar power plant in Maharashtra to serve primarily as a captive supplier of power to Orient Cement. The stake buy is a regulatory requirement under India’s captive consumption laws.

The stake has been valued at Rs 4.5 crores, which would imply a total equity base of around Rs 18 crores for the firm. Enough to leverage debt that would support the solar plant for  13.5 MW in size that is being panned.

“The Company has entered into Share Purchase, Subscription and Shareholder’s Agreement with AMP Solar Technology and AMPSolar Systems on December 3, 2020 for acquisition of 26 per cent stake in the share capital of AMPSolar Systems for putting up the solar power plant with capacity of 13.5 MW, under Captive Scheme,” it said.

The pant should be up and running in 2021 itself, considering the limited approvals required. Cement firms in India have been under pressure to cut down their carbon emissions for some time now, and many of the larger firms have taken significant steps to move down that path. Dalmia cement, for instance, has committed to using 100 percent renewable energy by 2030.

As the world’s second largest producer of cement, firms in India have also been a key part of initiatives by the government to get industry on board for major climate mitigation efforts. As a CEO forum last month with the Environment minister, using more renewable energy was the most common promise from industry heads, especially the cement majors that were represented at the meeting.

Expect a lot more action in the space, especially in the captive generation space, where developers might even look to trade power generated during periods of low demand and shut downs, thanks to the push being given to trading now.