NTPC Planning for Renewable InvIT in JV With NIIF

NTPC is mulling over creating a JV with the central governments’ strategic investment fund NIIF to set up a renewable InvIT.

State-owned power giant NTPC Ltd has proposed that it is mulling over creating a joint venture company with the central governments’ strategic investment fund NIIF to set up a renewable infrastructure investment trust (InvIT).

As per industry source, the proposed InvIT will help NTPC to monetise some of its operational renewable energy projects. Further, the funds raised from such exercise have been proposed will be used by the power producer to invest in additional renewable capacity.

As per the initial plan, NTPC would put its entire 1 GW of operational renewable assets and the 2 GW of RE projects in the pipeline under the trust. This will help to raise capital for further expansion of its renewable energy capacity. The power producer is also looking to expand the scope of its partnership with NIIF to foray into the power distribution business where it is bidding for privatisation of Union Territory Discoms.

In May, we had reported that the firm was planning to foray into the electricity distribution business as it had evinced interest to acquire a majority stake of 51 percent in Anil Dhirubhai Ambani Group’s (ADAG) two utilities. The ADAG has two Discoms in Delhi namely BSES Rajdhani Power Ltd (BRPL) and BSES Yamuna Power Ltd (BYPL), which supplies electricity to approximately 4.4 million customers.

NTPC plans to generate 25 percent of its power capacity from renewable sources by 2030, which will be equivalent to 32 GW of power capacity and require an investment of Rs 1.60 lakh crore. Experts believe the InvIT route would be ideal to unlock the value of existing assets for making future investments in green projects.

With a total installed capacity of 62,110 MW, the NTPC Group has 70 power stations comprising 24 coal-based units, seven combined cycle gas/liquid fuel stations, one hydro, 13 renewables, along with 25 subsidiary and joint venture entities.