Power Grid Corporation of India (PGCIL) has firmed up a Rs 3 lakh crore investment plan for the next five years for a bouquet of projects including expansion of transmission capacity, both inter-regional and intra-state, and development of transmission system for 20 gigawatt (gw) of solar, 30 gw of wind and 7 gw of nuclear projects.
The central transmission utility also plans to tap opportunities in energy storage, electric vehicle charging infrastructure and wire business.
Power Grid chairman and managing director I S Jha told DNA Money, “At present, the projects worth Rs 1.50 lakh crore are under various stages of construction. Projects of another Rs 1.50 lakh crore will be tapped for intra-state transmission projects and transmission capacity development for the upcoming renewable energy projects. It’s going to be a great five years. Power Grid is fully equipped to undertake these projects.”On intra-state projects, Jha said the company would take up consultancy jobs and help states to put in place necessary transmission infrastructure. “If states have no money, PGCIL will invest. If we build transmission on their behalf with our own investment, the cost of transmission will be lower as our debt is less. If that doesn’t work then Power Grid is open for 50:50 joint venture model that is already quite successful in Bihar. Andhra Pradesh and Telangana have evinced interest for the same. Besides, the company will also participate in the competitive bidding proposed by various states.”
He said the company would also associate with Jammu & Kashmir’s smart grid project.
It will tap business opportunities in energy battery storage and set up of electric vehicle sharing infrastructure. Two battery storage pilot projects have been completed while the third will be finished by December this year. Power Grid will also take up railway electrification projects and enter wire distribution business.
Jha said Power Grid will continue to explore opportunities abroad.
“As on date, we are present in 19 countries in the consultancy segment. We will also focus on engineering, procurement and construction in Asian and African countries apart from consultancy. The company is also open to implementing transmission projects on build own operate transfer basis.”
On mobilisation of funds, Jha said it will be done through multiple instruments including domestic bond market and loans from banks, multilateral and bilateral agencies. It will also explore masala bonds. Power Grid implements projects on 70:30 debt-equity ratio. Of the 70% debt, nearly 30% is foreign.
During the current fiscal, PGCIL plan a capital expenditure of Rs 25,000 crore.
“Our, this year’s capital expenditure plan is of Rs 25,000 crore, for which we plan to raise Rs 17,500 crore during the ongoing fiscal as debt,” said K Sreekant, director – finance.
The company does not intend to raise debt in the ongoing quarter. “It will be raised only in the second and third quarters,” said Jha.
Multilateral funding will comprise around 30% of the overall debt.
Starting second quarter, at least Rs 4,000 crore will be raised per quarter.
With the end of 2016-17, the 12th Five-Year Plan has concluded and Power Grid has achieved the highest ever capital investment of Rs 112,664 crore, surpassing the target of Rs 1,10,000 crore.
In the next five years, the company has projects worth Rs 150,000 crore that needs to be executed. The organisation has already spent around Rs 39,000 crore on them.
The projects it is eyeing includes electrification of railway lines of 24,000 km and renewable power projects that will come up in the coming months.
The company posted a 22% rise in net profit for the quarter ended March at Rs 1,916 crore.
For the full fiscal, its standalone net profit rose 26% to Rs 7,520.15 crore in 2016-17, while its total income also rose to Rs 26,581.41 crore in fiscal 2017 from Rs 21,243.30 crore in the previous one.
The central transmission utility also plans to tap energy storage, electric vehicle charging infrastructure and wire business
The firm would associate with Jammu & Kashmir’s smart grid project