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Orient Green Power aims to reach 1GW renewable capacity through solar expansion in 50-70 characters

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In Short:

Orient Green Power Company (OGPL) plans to expand its renewable energy capacity to 1 GW by venturing into a hybrid model of wind and solar energy. To support this, OGPL is launching a ₹250 crore rights issue to enter the solar market and reduce debt. They aim to develop a 39.6 MW solar capacity in two phases. OGPL has refinanced debt and reduced its debt burden to ₹767 crore in FY24.

Orient Green Power Company Embarks on Renewable Energy Expansion

Exciting news from **Orient Green Power Company (OGPL)** – they are gearing up to broaden their presence in the renewable energy sector! The goal? To achieve an impressive installed capacity of 1 GW. How, you ask? By delving into a hybrid model that combines both wind and solar capacities. A fresh and innovative approach indeed!

Raising Funds and Breaking Barriers

For this monumental expansion, **OGPL** is planning to launch a new rights issue, with the aim of raising a staggering ₹250 crore. This boost in funding will be instrumental in not only stepping into the solar market but also in slashing down existing debts. Talk about a strategic financial move! Just last year, the company successfully garnered around ₹230 crore through a similar rights issue – a clear indication of their upward trajectory.

Shining Bright in the Solar Sector

The company’s subsidiary, **Delta Renewable Energy Private Limited**, is all set to develop a solar capacity of 39.6 MW. Divided into two phases of 19.8 MW each, the first phase will be fueled by the proceeds from the rights issue, while the second phase will be supported through debt. A well-thought-out plan indeed!

Charting the Path to Success

As rightfully pointed out by **KS Sripathi**, Chairman of **OGPL**, “This strategic move sets the stage for our expansion in the solar industry.” He further added, “Additionally, we are exploring hybrid models combining wind and solar to further enhance our presence and reach our targeted installed capacity of 1 GW in the years ahead.” A visionary approach towards a greener future!

Debt Reduction and Financial Triumphs

Recent data as of March 31, 2024, reveals that **OGPL** currently boasts an installed capacity of 402.3 MW from wind power plants spanning across Tamil Nadu, Andhra Pradesh, Gujarat, Karnataka, and even Europe. Envisioning growth, the company has kick-started component upgrades on selected windmills, scheduled for completion in the upcoming fiscal year, thereby augmenting power generation prospects.

In a bid to fortify their financial standing, **OGPL** has successfully refinanced over ₹780 crore of secured borrowings at substantially lower interest rates in FY24. The company’s prudent move to utilize the rights issue proceeds to repay promoter loans amounting to ₹170 crore has significantly alleviated their debt load.

Consequently, the company’s debt has seen a considerable dip, standing at ₹767 crore in FY24, down from ₹1,078 crore in FY23 and ₹1,351 crore in FY20. Further bolstering its financial resilience, **OGPL** has established a Debt Service Reserve Account (DSRA) of about ₹69 crore, adding another layer of strength to its financial arsenal.

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