Tata Power on Friday said it had been awarded the contract to develop a 100 MW solar project in Maharashtra. This follows close on the heels of another 120MW solar plant in Gujarat awarded to the company on June 15.
Tata Power’s cumulative renewable energy capacity, including 2,637 MW operational projects, now stands at 3,557 MW. The development comes at a time when it is in the advanced stages to monetise its renewables assets to reduce debts.
“Given falling global yields amid the strong performance of renewables assets during Covid-19, Tata Power can likely create either a platform or an InvIT out of the renewables portfolio,” HSBC Global Research said in a recent report.
Tata Power is consolidating its entire renewable energy portfolio into Tata Power Renewable Energy and the new structure is expected to be finalised by the end of Q2FY20.
The 2,866 MW of wind and solar power-producing capacity constitute more than 26% of the company’s generation portfolio. Ebitda of Tata Power’s renewables business fell 13.4% year-on-year (y-o-y) to Rs 558 crore in Q4FY20.
The company’s under-construction renewables projects were initially impacted in first phase of lockdown, but work on sites have resumed and imports from China have started. The renewable energy business has debt of around Rs 11,000 crore.
Bulk of the company’s debt reduction is being driven by the selling of it non-core assets. It received $112 million from the sale of South Africa’s Cennergi power plant in April 20, which will be used to repay loans. The firm has also signed definitive agreements with Germany’s Oldendorff Carriers for selling three ships at a consideration of $212.8 million. Tata Power’s debt stands at Rs 43,578 crore.
