Tired of delays, Tata Power turns to overseas for expansion

Tired of delays, Tata Power turns to overseas for expansion

As project awards and execution have been down to trickle for quite some time for want of regulatory approvals, apart from mounting challenges on fuel supply front, Tata Power has decided to focus on overseas opportunities to meet its 2020 vision.

The country's largest private sector power utility, which is the fourth largest among the Tata Group companies in terms of topline, has a 26,000 MW generation target by 2020.

"Considering the present situation (coal availability and delay in decision-making), I don't believe that this target can be achieved from the domestic market, even though the country needs those kinds of capacities," Tata Power Managing Director Anil Sardana told PTI. Therefore, the company is devoting a good part of its time and energy in identifying opportunities in foreign lands to meet its ambitious target of 26,000 MW by 2020, he said.

Accordingly, the company has shortlisted some places abroad to scout for suitable projects and partners. "We are certainly looking at the shortlisted geographies which include Africa, Southeast Asia region, the Middle East, the Far East starting from Indonesia, Vietnam, etc," Sardana said, adding that the company has enough fuel linkages for its existing plants, but there is no clarity for future projects.

"We have not really moved ahead with new projects in the country as there is no clarity on fuel supply, particularly for coal-fired plants," Sardana said.

In the immediate long-term, he said, the company will add about 4,000 MW by FY15 but did not specify if it would be from domestic or proposed overseas operations. "Our target is 10,000 MW by the end of the next two fiscals," he said.

Several issues, ranging from acute coal shortages to environmental hurdles and poor financial health of discoms, are hurting the country's power sector, which has a generation capacity of over 2 lakh MW.

Currently, the company has a generating capacity of over 6,624 mw including 852 mw from renewable energy sources like wind, hydro, solar, etc. It has also set a target of 20-25 percent of output from renewable sources by 2020.

On if the overseas capacities will comprise renewable energy, Sardana said, "It will be a mix of both conventional as well as non-conventional. We want to achieve our targets and for that we will take whichever route is possible. We are very flexible with any model."

Tata Power has already formed a 50:50 joint venture with the South Africa-based diversified resources company Exxaro Resources to create Cennergi, which will focus on developing power generation projects in South Africa, Botswana and Namibia.

"We are open to partnering with local companies for expanding our footprint in the shortlisted countries where we have already set up offices. We have told each of our team in the above mentioned markets that the company is open to investing in these countries. We will invest in whichever project that fetches the development rights faster than the other. That's the way we will go ahead," Sardana said.

These countries have the potential of setting up of nearly 3,000 mw capacity, he added.

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