NTPC stands to gain immensely as the Narendra Modi government works on its vision to deliver round-the-clock electricity supply to every household in the country. The company has sharpened its project execution skills of late and is now thinking of raising the capacity addition bar for itself. NTPC chairman Arup Roy Choudhury talks about the PSU’s growth plans. Excerpts:
What is the growth outlook for the power sector and NTPC over the long and medium terms?
The new government has envisaged supplying electricity 24x7 to each household in the country. With India’s per capita annual electricity consumption of 917 unit still among the lowest in the world, the government’s plan entails huge growth opportunities for the sector and NTPC. Also, bifurcation of the erstwhile Andhra Pradesh has opened opportunities for NTPC to set up power plants to meet the electricity requirements of Telangana and Andhra Pradesh. But for the sector to remain viable over the long term, discoms must be allowed to recover their costs of power supply.
How is NPTC’s 12th Plan capacity addition programme progressing?
As much as 1,835 MW capacity was added in 2013-14 while contract was awarded for implementation of 4,150 MW capacity. We plan to add 14,038 MW capacity during the 12th Plan period; 6,025 MW, or 42% of the target, has been added. Our 12th Plan capacity addition programme includes hydel projects with 1,499 MW capacity. We are establishing a 750 Mw solar power plant in Rewa, Madhya pradesh, for which an MoU was signed recently. We are targeting to generate 3,500 Mw through solar power in the next few years, of which 1,000 Mw would be in Andhra Pradesh, Telangana and Rajasthan and scouting for land for these projects. We have already operationalised 95 MW solar-based generation capacity. India has a long coastline of over 7,600 km with a sizeable potential for offshore wind power generation. NTPC has signed a pact with the ministry of new & renewable energy recently to develop India’s first offshore wind power project.
Investors’ confidence in the power sector has taken a hit due to problems like fuel supply constraints. Is NTPC also impacted by sagging investor interest?
Even amidst the general downturn in the economy and in the poor market conditions during the year 2013-14, NTPC enjoyed tremendous investor confidence. On the very first day of its launch, that is, December 3, 2013, NTPC’s public issue of tax-free bonds worth R1,000 crore was oversubscribed by 3.7 times and bonds worth R1,750 crore were finally issued. Subsequently, additional bonds of R500 crore were issued on a private placement basis at a premium, which were also oversubscribed by 1.2 times. For the first time, NTPC placed taxable bonds amounting to R750 crore directly with the EPFO at a coupon rate of 9.34%, taking the total bonds issued during 2013-14 to R3,000 crore. We have also raised long-term foreign currency loans of $700 million from multilateral banks, including KfW, Japan Bank for International Cooperation (JBIC) and Sumitomo Mitsui Banking Corporation (SMBC) to finance our upcoming projects. We recently signed a syndicated term loan facility of $250 million with Mizuho Bank. The loan carries a floating rate of interest linked to Libor and has a door-to-door maturity of seven years.
What have been NTPC’s key achievements in recent years?
The biggest achievement is the quantum jump in the capacity addition rate. We added almost 10,000 MW in a span of just three years, which would earlier take us 10-11 years at least. This was possible due to the paradigm change in NTPC’s project execution matrix that we have introduced. We have projects totalling 22,000 MW currently under execution and are targeting to commission 5,000 MW capacity every year.
How are things on the CSR front?
We have enhanced the allocation for CSR and sustainable development activities. A total expenditure of R128.35 crore was incurred towards corporate social responsibility and sustainable development activities during the year 2013-14, which exceeded the target. We plan to cover a very large number of CSR areas, ranging from infrastructure development, including toilets for women, to vocational training.
What is the growth outlook for the power sector and NTPC over the long and medium terms?
The new government has envisaged supplying electricity 24x7 to each household in the country. With India’s per capita annual electricity consumption of 917 unit still among the lowest in the world, the government’s plan entails huge growth opportunities for the sector and NTPC. Also, bifurcation of the erstwhile Andhra Pradesh has opened opportunities for NTPC to set up power plants to meet the electricity requirements of Telangana and Andhra Pradesh. But for the sector to remain viable over the long term, discoms must be allowed to recover their costs of power supply.
How is NPTC’s 12th Plan capacity addition programme progressing?
As much as 1,835 MW capacity was added in 2013-14 while contract was awarded for implementation of 4,150 MW capacity. We plan to add 14,038 MW capacity during the 12th Plan period; 6,025 MW, or 42% of the target, has been added. Our 12th Plan capacity addition programme includes hydel projects with 1,499 MW capacity. We are establishing a 750 Mw solar power plant in Rewa, Madhya pradesh, for which an MoU was signed recently. We are targeting to generate 3,500 Mw through solar power in the next few years, of which 1,000 Mw would be in Andhra Pradesh, Telangana and Rajasthan and scouting for land for these projects. We have already operationalised 95 MW solar-based generation capacity. India has a long coastline of over 7,600 km with a sizeable potential for offshore wind power generation. NTPC has signed a pact with the ministry of new & renewable energy recently to develop India’s first offshore wind power project.
Investors’ confidence in the power sector has taken a hit due to problems like fuel supply constraints. Is NTPC also impacted by sagging investor interest?
Even amidst the general downturn in the economy and in the poor market conditions during the year 2013-14, NTPC enjoyed tremendous investor confidence. On the very first day of its launch, that is, December 3, 2013, NTPC’s public issue of tax-free bonds worth R1,000 crore was oversubscribed by 3.7 times and bonds worth R1,750 crore were finally issued. Subsequently, additional bonds of R500 crore were issued on a private placement basis at a premium, which were also oversubscribed by 1.2 times. For the first time, NTPC placed taxable bonds amounting to R750 crore directly with the EPFO at a coupon rate of 9.34%, taking the total bonds issued during 2013-14 to R3,000 crore. We have also raised long-term foreign currency loans of $700 million from multilateral banks, including KfW, Japan Bank for International Cooperation (JBIC) and Sumitomo Mitsui Banking Corporation (SMBC) to finance our upcoming projects. We recently signed a syndicated term loan facility of $250 million with Mizuho Bank. The loan carries a floating rate of interest linked to Libor and has a door-to-door maturity of seven years.
What have been NTPC’s key achievements in recent years?
The biggest achievement is the quantum jump in the capacity addition rate. We added almost 10,000 MW in a span of just three years, which would earlier take us 10-11 years at least. This was possible due to the paradigm change in NTPC’s project execution matrix that we have introduced. We have projects totalling 22,000 MW currently under execution and are targeting to commission 5,000 MW capacity every year.
How are things on the CSR front?
We have enhanced the allocation for CSR and sustainable development activities. A total expenditure of R128.35 crore was incurred towards corporate social responsibility and sustainable development activities during the year 2013-14, which exceeded the target. We plan to cover a very large number of CSR areas, ranging from infrastructure development, including toilets for women, to vocational training.
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