New Delhi, Dec 14, 2010 (AFP) India’s largest power producer NTPC Ltd ( NTPC.NS ) plans to sell 20% of its green energy business this fiscal year for up to 30 billion Indian rupees ($363.97 million). Three government sources said.
The deal marks the first green transaction of an Indian state company, with investors including the Canada Pension Plan Investment Board (CPIB), Malaysia’s Petronas and Brookfield.
The decision to sell 20% to strategic investors follows the initial public offering of NTPC Green Energy Ltd (NGEL) in the next financial year, said two of the sources, senior government officials with direct knowledge of the matter.
India’s renewable sector is one of the top five industries attracting the most foreign investment this year. According to India’s Ministry of Commerce data, the percentage of total foreign direct investment inflows increased to 5 percent in April-September 2022 compared to 3.3 percent.
NTPC initially planned to raise funds through a public share sale. The company is now looking to sell an initial 20% stake through a private placement as this will provide value for the IPO, a third source said. The amount of the stock sale and the value of the deal have not been previously reported.
NTPC did not respond to requests for comment.
Investment
NTPC plans to invest over 2.5 trillion rupees over the next 10 years to increase the share of non-fossil fuels in its portfolio to 45 percent from the current 9.41 percent. The remaining capacity is on coal fuel.
In total, it is open to selling 49 per cent stake in the green energy unit for cash, the sources said.
“The proposal has been moved by the Ministry of Power to be considered by the Federal Cabinet. The sale of shares is targeted during the fiscal year,” said one of the sources.
The Indian financial year begins on April 1 and lasts until March.
In September, NTPC floated an expression of interest to sell its minority stake in NGEL to test investors’ appetite for share placement. It received 13 bids from investors including ArcelorMittal, India’s NIIF and Abu Dhabi-listed TAQA.
NTPC Green Energy will be the leader for the parent company’s non-fossil energy businesses. The company It has pledged to add 60 gigawatts of renewable energy by 2032 to deliver a total of 130 gigawatts as a group.
On Tuesday, the company said it had passed 1 gigawatt of annual capacity in the renewable energy segment.
NTPC said it will not set up new coal-based projects but is considering a few expansion projects at existing wellhead plants. Total capacity of NTPC is 70.7 GW.
In the year With a goal of becoming net zero by 2070, India is committed to generating 50% of its electricity from non-fossil fuel sources by 2030.
The country plans to generate 500 gigawatts of renewable energy by 2030. Renewable energy sources, including wind, hydro and biomass, account for 30% of the country’s installed capacity of 409 gigawatts.
($1 = 82.4250 Indian Rupees)
Reporting by Sarita Chaganti Singh. Editing by Jane Merriman
Our Standards: The Thomson Reuters Trust Principles.
