JSW Energy Ltd. is planning to reorganise its renewable business and expects clarity in 90-120 days.
The company is open to a possible sale or demerger or bringing in strategic investor for its green business, Prashant Jain, managing director at JSW Energy, said in an interview with BloombergQuint. The board has already appointed a legal and financial adviser for working out a proposal in three to four months, he said, adding that there will be more clarity by then.
JSW Energy Ltd. has already laid out a Rs 75,000-crore plan to increase its solar, wind and hydropower capacity in a shift away from coal. The company has also partnered with Australia's Fortescue Future Industries to production of green hydrogen. That comes investors globally are increasingly putting their money into companies meeting ESG goals.
Lack of water caused renewable net generation to decline in the quarter ended June. Jain, however, said JSW Energy's earnings are insulated over the near term given that 96-97% of the operating income is tied to long-term power agreements. That prevents fluctuation in income from fuel prices, dollar exchange rate or generation profile, he said.
The company expects a mid- to high-teen return on hydrogen business. Jain said it's above industry standard's rate of return of 12-14.5%.
Watch the full interview here:
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