‘We’ll spend ~8-10K cr on capex every yr’
JSW Energy proposes to increase its renewable energy capacity from around 32 per cent to 55 per cent in the next two years, PRASHANT JAIN, the firm’s joint managing director and chief executive, said in a conversation with Viveat
Susan Pinto. Jain highlights the building blocks the company is putting in place to achieve this target. Edited Excerpts:
What makes you bet on the renewable energy sector even as 70-75 per cent of India’s electricity generation is accounted for by coal-based power plants?
The answer to this lies in the growth prospects for renewable energy. Yes, over twothirds of India’s electricity generation is currently coalbased, but this is not sustainable. The current power crisis in the country bears this out quite clearly. The future is renewable energy, especially in view of India’s commitment at COP26 of reaching net-zero emissions by 2070 and a target of achieving 500 gigawatts (Gw) of non-fossil-fuelbased energy capacity by 2030. Our priorities are clear that growth is in renewable energy, not thermal energy.
While setting up renewable energy power plants is one part of your strategy, are you open to acquisitions in the sector?
Yes, we are open to acquisitions in all areas including wind, solar, and hydel, but the valuations have to be right. Given the interest shown by multiple players in green energy, valuations quite often become unsustainable for assets on the block. We are cognizant of this and want to be realistic when considering acquisitions. Having said that, we are already constructing 2.25 Gw of greenfield renewable energy capacity, which should come on stream in the next 12-18 months. As we go forward, the share of renewable energy capacity in our portfolio will continue to increase in line with our growth strategy.
How do you propose to fund this capacity expansion? Will capital expenditure (capex) grow with your push into renewable energy?
We will be spending between ~8,000-10,000 crore on capital expenditure every year as we grow our presence in renewable energy. Right now, with the 2.25-Gw greenfield renewable (energy) capacity under construction, capex is higher. We have a capex plan of nearly ~16,000 crore approved by the board for this capacity expansion. So far, ~9,600 crore has been committed for this capex plan, the balance will be committed in the current financial year. After that, we will be spending ~8,00010,000 crore annually on capital expenditure.
How do you propose to fund your capex of ~10,000 crore in the future?
It will be a mix of internal accruals and debt. We generate ~2,500 crore of cash profits annually, which will be utilised for capex. The balance of ~7,500 crore will be financed via debt.