Transrail Lighting Ltd, an engineering, procurement and construction (EPC) company in the power transmission and distribution sector, has approved the acquisition of a 49% equity stake in NOPL Pace Green Energy Pvt Ltd for ₹20 crore.
NOPL is developing a solar power portfolio with an aggregate capacity of about 990 MW (AC) in Maharashtra under Component C of the Centre’s PM-KUSUM scheme. The project aims to solarise agricultural feeders and improve daytime electricity availability for irrigation.
Portfolio backed by 25-year power agreement
The solar portfolio is backed by a 25-year power purchase agreement with Maharashtra State Electricity Distribution Company Ltd (MSEDCL) at a fixed tariff of ₹3.10 per unit.
The indicative project cost is about ₹3,900 crore. Debt financing has been sanctioned by a financial institution, subject to applicable financing and disbursement conditions.
Transrail to retain project control
Although Transrail will initially acquire a 49% stake, the investment structure is designed to provide it with financial and project management control under arrangements agreed with Onix Renewable Ltd.
The agreement also provides flexibility for Transrail to increase its shareholding to as much as 100%, subject to mutually agreed terms and applicable approvals.
Company targets integrated energy business
“This is an important step in our journey from an EPC company to an integrated energy solutions provider. Our entry into solar power generation lets us participate across the full energy value chain, from generation to transmission and distribution, alongside our strong manufacturing base for transmission products,” Transrail Lighting, Managing Director and Chief Executive Officer, Randeep Narang, said.
The company expects to leverage its experience in executing large infrastructure projects to accelerate project implementation. The investment is also expected to expand its business beyond EPC into renewable power generation, creating the potential for recurring earnings after commissioning.
Focus on long-term growth
Transrail expects the solar project to strengthen its presence across the energy value chain and complement its existing transmission and distribution operations.
The company expects the portfolio to contribute to more stable long-term revenues and margins as it builds its renewable energy business.