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Orient Green Power Company (OGPL) is set to expand its footprint in the renewable energy sector and has set a target to reach an installed capacity of 1 GW by venturing into a hybrid model of wind and solar capacities or both.
To support this expansion, OGPL is preparing to launch another rights issue, aiming to raise ₹250 crore. This funding will primarily be directed towards entering the solar market and reducing existing debt. Last year, the company successfully raised approximately ₹230 crore through a similar rights issue.
OGPL plans to develop a solar capacity of 39.6 MW through its subsidiary, Delta Renewable Energy Private Limited. This project will be executed in two phases, each comprising 19.8 MW. The first phase will be financed by the proceeds from the rights issue, while the second phase will be funded through debt.
“This strategic move sets the stage for our expansion in the solar industry,” stated KS Sripathi, Chairman of OGPL, in the company’s annual report. “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,” he added.
As of March 31, 2024, OGPL’s installed capacity stood at 402.3 MW of wind power plants across Tamil Nadu, Andhra Pradesh, Gujarat, Karnataka and also Europe.
In alignment with its growth strategy, the company has initiated component upgrades on selected windmills, expected to be completed in the next fiscal year. This upgrade is anticipated to enhance power generation in the future.
In FY24, OGPL refinanced over ₹780 crore of secured borrowings at interest rates approximately 300 basis points lower. Additionally, promoter loans amounting to ₹170 crore were repaid using the rights issue proceeds, significantly reducing the company’s debt burden.
Consequently, OGPL’s debt decreased to ₹767 crore in FY24, down from ₹1,078 crore in FY23 and ₹1,351 crore in FY20. The company has also established a Debt Service Reserve Account (DSRA) of about ₹69 crore, bolstering its liquidity position.
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