Government-owned NLC India Limited (NLCIL) has planned a massive capital expenditure of Rs 82,174 crore across mining and power projects by 2030.
NLCIL chairman and managing director Prasanna Kumar Motupalli outlined the upcoming projects in an interview with Pinak Ghosh from The Telegraph and the plans to raise debt to finance the expansion.
What is the aggregate capital expenditure plan for NLCIL?
A capex of Rs 82,174 crore is envisaged till 2030 as per the projects that have been sighted and contemplated. Initially, the capex will be less till 2025 and then we will be spending more than Rs 15,000 crore a year towards projects.
How would the capex spend be financed? The debt-equity ratio for the company improved from 1.41 in 2019-20 to 0.64 in 2022-23. Will this see a further rise?
The capex (Rs. 82,174 crore) is to be funded in the debt-to-equity ratio of 70:30 in the case of thermal and mine projects. For renewable energy projects, a debt-to-equity ratio of 80:20 is being considered. Approximately Rs 50,000 crore debt will be raised during the period and the equity will be met from the internal accruals. With new projects coming up in the next six years, the debt component will be increasing and hence the ratio may reach up to 1.5 to 2.
What are the projects in the pipeline in mining and estimated timeline for commission?
As per the approved corporate plan, the mining capacity was initially set to increase to 82.1 MTPA (from 50.1 MTPA as of December 2023). However, currently, we are revisiting the same in a changed business scenario to reach a target of 100.35 MTPA. The upcoming mining projects are located in Jharkhand and Tamil Nadu and there are also commercial coal blocks. The approximate investments in these projects will be around Rs 13,000 to Rs 14,000 crore. Upon completion of the revalidation plan, the exact cost estimates will be firmed up.
In Jharkhand, the Pachwara South coal block will be commissioned by 2024–25 and North Dhadu (Western Part) by 2027–28. In Tamil Nadu, Mine III project by 2028–29. The commercial coal blocks and the Palaymkottai mine (in Tamil Nadu) would be commissioned in the subsequent years.
What are the projects in the pipeline in power and renewable energy and estimated timeline for commission?
All our upcoming thermal power projects are advanced ultra-supercritical technology plants with state-of-the-art technology emission control devices. From the present capacity, another 6,500 MW is set to be added to reach 11,140 MW capacity by 2030 with projects in Uttar Pradesh, Odisha and Tamil Nadu.
Renewable energy has gained utmost importance and the market has matured currently, making it a vital and attractive investment for power companies.
With regulatory and government push on renewable energy, the capacity envisaged is set to be further increased, based on business conditions. We are now looking at a renewable capacity of 4,500 MW to be commissioned by 2030. These include wind and solar projects.
