THE GOVERNMENT’S ENERGY transition initiative, which aims at 500 GW renewable capacity by 2030 and net zero emissions by 2070, has come as a mega opportunity for new-age companies as well as traditional power sector players. No wonder when Prime Minister Narendra Modi announces schemes such as PM Suryodaya Yojana, a subsidy scheme for rooftop solar and grid connectivity, shares of energy companies zoom.

One company that has carved out a niche for itself in green energy is Satluj Jal Vidyut Nigam Ltd. (SJVN), a joint venture between Central government and Himachal Pradesh government with installed capacity of 2,227 MW. Of that, 1,972 MW is hydro, 97.6 MW wind and 156.9 MW solar. The company also has 123 km transmission lines, which include a 86-km line from Muzaffarpur in Bihar to Sursand on Indo-Nepal border. Its total income grew 24.41% to ₹3,294 crore in FY23. Meanwhile, in first nine months of current financial year, it posted a revenue of ₹2,303 crore compared with ₹2,699 crore in April–December 2022. It is ranked fourth in overall profits in Fortune India The Next 500 list.

Analysts tracking the sector point at high plant load factor (PLF) for the strong performance. “SJVN has a PLF of 54% versus NHPC’s 46% and all-India average of 39%. Its plant availability factor (PAF) has been above 100% compared with the normative requirement of 85-90% set by the electricity regulator. As a result, SJVN has enjoyed superior profitability over the years, with average return on equity of 12.5% compared with NHPC’s 9.4%, during 2014-2022,” Monarch Networth Capital says in a report last December.

Back-to-back commissioning of projects has given a significant fillip to top-line. The spree continues in last quarter of current fiscal. SJVN has recently commissioned 175 MW Jalaun solar project in Uttar Pradesh with a capacity of 160 million units per annum which is being sold to Uttar Pradesh Power Corporation. It has also commissioned 60 MW Naitwar Mori hydro project in Uttarakhand with a capacity to produce 337 million units which is being sold through power exchange.

“SJVN is operating nine power stations with installed capacity of 2,227 MW. The major source of profitability is its two hydro power stations, 1,500 MW Nathpa Jhakri Hydro Power Station and 412 MW Rampur Hydro Power Station. The plants are operated with optimum usage of water, silt management and PAF above 100%,” says Geeta Kapur, director (Personnel) and CMD (additional charge), SJVN.

“During last two years, SJVN has commissioned 70 MW Parasan Solar Power Project, 75 MW Gurhah Solar Power Project and 60 MW Naitwar Mori Hydro Power Project, leading to higher revenue and profitability. All these ensured profitability,” Kapur tells Fortune India.

The projects being implemented provide revenue visibility for the near future. SJVN is building four hydro projects of 1,558 MW capacity and seven solar projects of 1,425 MW. Additionally, Central government has approved proposals for formation of two joint ventures for renewable energy projects; with Assam Power Distribution Company for 1,000 MW projects and with Maharashtra State Power Generation Company for 5,000 MW projects.

To fund expansion, the company has secured ₹10,000 crore construction finance for upcoming renewable energy projects from a group of leading domestic and international financial institutions. SJVN Green Energy Ltd. (SGEL), a wholly owned subsidiary of SJVN, raised the funds in association with SBI Capital Markets (SBI Caps). This construction finance deal was over-subscribed. Proposals from five banks, Deutsche Bank, State Bank of India, Punjab National Bank, Bank of India and MUFG Bank, were accepted. “This revolving credit facility allows SJVN to draw down funds on an ongoing basis as per construction requirements. This will enable it to fast-track under-construction renewable energy projects and contribute to government of India’s target of achieving 500 GW renewable energy by 2030,” says the company.

“From current installed capacity of 2.1 GW, mostly hydropower, SJVN aims to achieve a capacity of 12 GW, 25 GW and 50 GW by 2026, 2030 and 2040, respectively, by investing in renewables, including hydro, and one coal-based thermal power project,” says Monarch Networth Capital report.

Rooftop Solarisation Opportunity

Finance minister Nirmala Sitharaman announced a plan for rooftop solarisation of one crore households in recent Interim Budget for FY25. “One crore households will be enabled to obtain up to 300 units free electricity every month,” she said. “SJVN has risen as one of the key players. It has been allotted three states, Himachal Pradesh, Punjab and Arunachal Pradesh,” according to Kapur. “As envisaged in the scheme, 10 million beneficiaries will get 300 units free electricity every month. This will result in savings of ₹15,000-18,000 per annum. Subsidy has also been raised from 40% to 60%. There has been an allocation of ₹10,000 crore for rooftop solar schemes,” she says.

To tap future opportunities, the company is going ahead with its planned capital expenditure. “SJVN has achieved capex of ₹4,725 crore as against target of ₹5,000 crore during FY22 and ₹9,035 crore as against target of ₹8,000 crore in FY23,” says Kapur.

“SJVN is committed to enhance its renewable energy portfolio. It aims to be a 25,000 MW company by 2030 and 50,000 MW company by 2040. A cumulative investment of ₹3.48 lakh crore is planned to meet these targets up to 2040,” says Kapur.

With benefit from government policies, as well as guided by their own vision of maximising power generation from operational projects and expediting under-construction projects, SJVN is building a massive green energy ecosystem.

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