Tata Power plans Rs 20,000 crore capex in current financial year

Tata Power capex plan: Tata Power has unveiled plans for current fiscal year with a projected 66 per cent surge in capital expenditure to Rs 20,000 crore compared to the previous year. The increased investment will primarily support projects aimed at facilitating India's energy transition and achieving its net-zero emission target by 2070.

CEO Praveer Sinha revealed during a post-earnings conference call that the company's capital expenditure for the fiscal year ended March 2024 amounted to approximately Rs 12,000 crore. Sinha further elaborated that the upcoming fiscal year will see a substantial increase in expenditure, targeting Rs 20,000 crore.

Highlighting the investment allocation, Sinha emphasised that around 50 per cent of the capital expenditure will be directed towards renewable energy projects, with the remainder allocated to a mix of transmission, distribution, and conventional projects.

Funding for the ambitious capital expenditure plan will primarily be sourced from internal accruals, supplemented by some debt, according to Sinha.

The announcement comes on the heels of Tata Power's robust financial performance, as evidenced by an 11 per cent increase in consolidated net profit to Rs 1,046 crore for the March 2024 quarter compared to the corresponding period last year. This growth trajectory is largely attributed to higher revenues.

In the renewable energy sector, Tata Power's 4.3 GW Cell & Module manufacturing facility in Tirunelveli, Tamil Nadu, has commenced production and has already commercially produced around 130 MW of modules.

Furthermore, during FY24, the company secured two projects worth Rs 2,300 crore through the Tariff-Based Competitive Bidding (TBCB) process. These projects include the Interstate Transmission System (ISTS) - Bikaner III Neemrana II Transmission Ltd and the Intrastate Transmission Scheme in Uttar Pradesh via SPV Jalpura Khurja Power Transmission Ltd.

With a commitment to transitioning to green energy, Tata Power aims to achieve around 70 per cent of its capacity from non-fossil-based fuels by 2030. As of March 31, 2024, the company's renewable energy portfolio stands at 4.5 GW operational capacity, with an additional 5.5 GW of projects under implementation, totalling over 10 GW in green energy capacity.

Moreover, Tata Power boasts a transmission lines portfolio of 6,277 Ckm (circuit kilometres), including 1,651 Ckm capacity in the pipeline, reaffirming its position as a key player in India's energy landscape.

(With PTI inputs)