3 min read.Updated: 09 Jun 2021, 05:34 PM ISTLivemint
Gail has submitted a proposal to the petroleum and natural gas ministry for an infrastructure investment trust (InvIT) for two of its pipelines. The plan is part of the government’s brownfield asset monetisation strategy
NEW DELHI: As part of its green energy playbook, Gail (India) Ltd. plans to bid for a 400-megawatt (MW) capacity along with Bharat Heavy Electricals Ltd (Bhel) in a state-run Solar Energy Corporation of India (Seci) tender, said a top company executive on Wednesday.
Given its focus on building a clean energy portfolio, in addition to participating in competitive bids, Gail is also looking to acquire solar projects from private firms, said Manoj Jain, chairman and managing director of Gail.
This comes in the backdrop of a change in global energy architecture, with India at the centre of oil majors’ future growth plans and state-run firms pivoting towards solar and wind energy.
Jain said while one way to expand was to bid for tenders, the other way was taking an inorganic growth route, with Gail looking at “big and small" private firms for acquiring assets.
Mint had earlier reported about Gail’s proposed plans for a tie up with ExxonMobil to set up a green energy platform in India. India is running the world’s largest clean energy programme to achieve 175 GW of renewable capacity, including 100GW of solar power and 60 GW of wind power by 2022.
Earlier, Infrastructure Leasing and Financial Services Ltd (IL&FS) had agreed to sell its 874 MW operational wind energy portfolio to the state-run gas utility for ₹4,800 crore. The deal was dropped with NYSE listed Japan’s Orix Corp. acquiring these assets from bankrupt IL&FS, and adding them to Hyderabad-based Greenko’s portfolio, after it invested $980 million in Greenko Energy Holdings.
Oil majors have been investing in India’s green economy as the conventional hydrocarbon space undergoes technological disruption. For example, France’s Total has invested $2.5 billion for acquiring a 50% stake in 2.35 GW operating solar assets of Gautam Adani-led Adani Green Energy Ltd (AGEL) and a 20% stake in AGEL. Also, Malaysia’s state-run oil and gas company, Petroliam Nasional Bhd or Petronas has acquired Amplus Energy Solutions Pvt. Ltd, one of India’s largest rooftop solar power producers.
Gail has a pact in place with Bhel “for cooperation in development of solar based power projects," wherein the former will be the project developer and the latter the engineering, procurement, construction and project management contractor.
Deal-making in India’s clean energy space has remained robust despite the overall turmoil caused by the covid-19 pandemic, with the global energy landscape shifting towards Environmental, Social and Governance (ESG) investing.
In another development Gail has submitted a proposal to the petroleum and natural gas ministry for an infrastructure investment trust (InvIT) for two of its pipelines. The plan is part of the government’s brownfield asset monetisation strategy, with the InvIT route being leveraged as an alternative fundraising route for state-run companies to manage their funding requirements without having to depend on government support.
InvITs are trusts that manage income-generating infrastructure assets, typically offering investors a regular yield and a liquid method of investing in infrastructure projects.
While declining to name the pipeline projects Jain said that Gail wants to test the market through these two pipelines.
Meanwhile, Gail said its net profit for the fourth quarter ended March fell to ₹1,908 crore from ₹3,018.2 crore in the year-ago period. Turnover was at ₹15,472 crore in the quarter. The PSU had reported a net profit of ₹4,890 crore for 2020-21 on a turnover of ₹56,529 crore.
“The petrochemical business has shown better performance with more than 100% capacity utilisation. The sales increased by 18% to 871 TMT, the petrochemical plant recorded highest ever production of 813 TMT," the PSU said in a statement.
Shares of GAIL fell 3.34% on the BSE on Wednesday to close at Rs162.20, while the benchmark index, Sensex, declined 0.64%.
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