Orient Green Power Company Limited (OGPL) a leading independent renewable energy-based power generation company in India, today shared that the company has scripted a turnaround and is making significant progress towards attaining leadership position in operational performance in the renewable energy industry.
OGPL has made major progress in the implementation of its transformation strategy. Divestment of the Biomass business has been substantially completed with the transfer of 8 biomass units on December 31, 2017. Sale of the remaining units, which is in progress, is expected to be concluded over the next 2 quarters following which OGPL will emerge as a pure wind energy company.
The improved operating environment for wind turbines, especially in Tamil Nadu, has elevated the operational performance of the wind business which is now delivering EBITDA that is reflective of its potential. The outlook for Renewable Energy Certificates has also steadily improved and company is confident of monetizing the inventory over the next few months. Given the stable operating conditions and their long-term agreements for sale of power, they are confident of not only sustaining but building upon this performance.
Sale of Biomass assets has already resulted in transfer of loans pertaining to those assets thereby reducing overall debt. Some of the loans pertaining to the wind business have been refinanced taking benefit of interest rates prevailing in the market.
The improved performance and attractive prospects of the wind business have opened the door for refinancing of larger tranches of debt at attractive levels which will lead to further reduction in finance costs.
OGPL has wind power capacity of 425 Mw spread across Tamil Nadu (308 Mw), Andhra Pradesh (75 Mw) and Gujarat (29 Mw) in India as well as a unit in Croatia (11 Mw). All of its capacity is operational with long-term supply contracts in place. Some of the power supply arrangements are due for upward revision enabling it to effectively counter pressure on tariffs.