The Shriram Group's renewable energy arm Orient Green Power Company Ltd (OGPL) said it is confident about the prospects of the business going forward as some of the strategies which the company has been working on will help to address most of the problems which had affected the functioning of the business.
The company said it is closely working on completing its on-going projects in a time bound manner and this should result in improved sales and margines in the coming years.
The company's immediate target is to complete the on-going 300 MW in the wind business and 46 MW in the biomass business. In addition to that, the company has undertaken few initiatives which should help to reduce to lower the interest outgo in the coming years.
One such initiative taken has been to go in for ECB for $35 million to part fund the expansion activities and this has been fully hedged at lower interest rate than that applicable for normally Rupee borrowing.
The new capacities will also lead to an increase in the proportion of new assets in the overall wind portfolio. Newer assets will help the company to delivery higher PLF's given their ability to harness wind power at lower wind speeds. Further since most of the new planned capacities will be available for majority of the wind season next year, it would lead to better performance for wind business vertical.
The company is also taking steps to improve the performance of the biomass business which has been facing headwinds in the form of lack of adequate feed stock supplies coupled with higher price of the same.
To counter the same, the company has started energy plantation on available lands. Apart from this the company is also working with local farmers in the neighbouring area of the biomass project to do contract farming the company's surplus land. The company is confident that these moves will make significant contribution to the business going forward.
