After taking over an 18-Mw wind farm from a group company, Tata Power is planning to build its wind power portfolio through acquisitions. It is on the lookout for wind power assets that are on sale.
Many companies are looking to exit their wind power businesses that are not core to their earnings. Last month, wind turbine maker Suzlon Energy sold stake in its wind energy farm to raise Rs 200 crore. Tata Power, the private sector power company, was earlier also looking for such opportunities, but could not clinch a deal, as the expectations of sellers were high.
“This time around, the prices may be better,” said S Ramakrishnan, executive director - finance of Tata Power. He did not disclose the names of wind assets that are on sale.
Tata Power has around 370 Mw of wind power capacity, and is implementing projects of another 140 Mw, for which it has already ordered equipment. It plans to add 150 Mw a year, along with 25 Mw of solar power. “This is subject to land availability,” said Ramakrishnan.
Apart from hydro power projects in Bhutan, Tata Power is expanding its renewable footprint overseas. It is conducting studies on a geothermal power project in Indonesia and scouting for wind and solar projects in South Africa, in partnership with local mining company Exxaro.
According to Ramakrishnan, the African country’s renewable policies offer unique advantages. The selection process lays emphasis on the preparedness of the bidder. For example, vendor support, land, transmission infrastructure commitment, in-principle sanction of loans and equity commitment. “This is apart from the tariff quoted. They do not go only for the lowest bidder. So, even though tariffs are market-driven, there is no unrealistic competition,” he said.
However, the company is not too keen on entering a new geography for renewables, as the size of opportunity is not large enough. The Tata group is already present in South Africa, which prompted the company to foray into the African country. In Indonesia, Tata Power owns stakes in coal mines of Bumi Resources.
“Our renewable focus remains to be in India,” said Ramakrishnan.