NTPC betting more on home coal-driven growth

Power generator NTPC, with an installed capacity of 47,178 Mw, in a serious bid to maintain its 25 per cent market share, is aggressively pursuing thermal and solar power addition.

The thermal strategy is domestic coal-driven. Projects of 24,000 Mw, with an investment of ~1.5 lakh crore, are under various stages of construction. The company hopes to commission projects of 4,500 Mw capacity during 2016-17. Of these, the commercial operation of 4,000 Mw is expected.

NTPC is also in talks with states to take over their old thermal units for revival, exploring a joint venture route after assessing the financial viability.

On solar energy, its target is 3,000 Mw capacity by 2019, uo from 360 Mw now.

Gurdeep Singh, chairman and managing director, says they’re adding only supercritical units, with higher efficiency. The company will start taking out coal from its Pakri Barwadih mine in Jharkhand in the next three months; in five years, he said, 18 million tonnes annually will be taken from the same mine.

NTPC hopes nearly a fourth of its coal will be procured from its own mines in the next five to 10 years. NTPC has not given any new orders for imported coal in the past eight-odd months. It was importing seven million tonnes via previous contracts.

Capital expenditure this financial year would be ~30,000 crore (standalone), of which ~5,538 crore was incurred in the June quarter. The capex (standalone) in 2015-16 was ~25,738 crore, against the target of ~23,239 crore.

Singh said the board of directors had passed an enabling resolution to be approved by shareholders, for raising ~15,000 crore in bonds this year. ''It will be raised in tranches.

NTPC’s average cost of funding was eight per cent and hopes to raise green masala bonds (offshore rupee-denominated ones, with the proceeds to be used for environment-frendly projects) at 8.1 to 8.4 per cent,” he said.

Singh said NTPC was in very sound financial health, with a debt to equity ratio of 1:1. “I don't think fund raising will be challenging,” he said.

NTPC hopes nearly a fourth of its coal will be procured from its own mines in the next five to 10 years