Tata Power to enhance focus on Renewables by aggregating and carving out renewable assets

The assets include 376.5 MW of wind assets in Gujarat, Maharashtra and Tamil Nadu, 3 MW solar asset in Mulshi and 120 MW of waste heat recovery based power plants at Haldia in West Bengal. 

 

The proposed structuring involves carving out of 500 MW of renewable assets of the Company to its subsidiary Tata Power Renewable Energy Ltd. (TPREL) and its subsidiaries. 

 

The proposed structuring is sought to be implemented by way of a Scheme of Arrangement (“Scheme”) under Sections 391 and Section 394 and other applicable provisions of the Companies Act, 1956.

 

The renewable wind assets, namely Bramhanvel (11.3 MW), Khandke (50.4 MW), Samana (50.4 MW), Gadag (50.4 MW),Visapur (10 MW),Sadawaghapur (17.5 MW),Agaswadi (49.5 MW) and solar assets at Mulshi (3 MW) are proposed to be aggregated in TPREL.

 

Additionally, Supa (17 MW) (Renewable Energy Undertaking No. 2), Nivede (21 MW), Poolavadi (99 MW) and Haldia (120 MW) are being transferred to four SPV companies which would be wholly owned companiess of TPREL.

 

On this development, Anil Sardana, CEO & MD, Tata Power, said, “The Company continuously evaluates various structures for its businesses to deliver better value to its shareholders by unlocking and enhancing operational synergies. Towards this objective, the Board of Directors of the Company has approved a scheme of arrangement of the Company’s renewable assets portfolio of wind, solar and production gases by consolidating them under the renewable arm namely Tata Power Renewable Energy Limited (TPREL), a wholly owned subsidiary of the Company. We aim to create a focused clean and renewable energy business in TPREL with its own growth trajectory. Since the aggregation of renewable assets is being done to a wholly owned subsidiary of the Company, the shareholders in the parent company shall have the same or better value accruing to them as earlier, even after the proposed restructuring.”

 

TPREL proposes to grow its capacity through organic and inorganic means over the next few years. TPREL is the primary vehicle through which Tata Power’s goal of 20-25% generation capacity from clean energy sources will be achieved.

 

The current installed capacity of TPREL is 220 MW (158 MW of wind and 54 MW of Solar) with 250 MW of renewable energy projects under construction. Post structuring, the total installed capacity of TPREL will be about 720 MW with additional 250 MW under construction. 

 

Other existing waste heat recovery based power plants of the company in certain JVs are also intended to be aggregated, subject to appropriate approvals and consents. The proposed restructuring is subject to necessary corporate/regulatory approvals, documentation and other details to be finalised.

 

This move will help in positioning TPREL as the primary clean and renewable energy vehicle. Further, the proposed transfer of the renewable energy business of the Company to TPREL would enable TPREL to tap different and competitive sources of capital to fund its growth plans. This would also enable TPREL and subsidiaries to pursue captive generation opportunities if available, subject to receipt of necessary approvals and compliance.