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State-run NTPC Ltd., India’s largest power generator, aims to take its renewables unit public to help fund a 2.5 trillion rupees ($34 billion) clean energy expansion, according to a company official with knowledge of the plans.

The New Delhi-based producer wants to list its NTPC Renewable Energy Ltd. unit in the next fiscal year, which begins in April 2022, the official said, requesting anonymity as the discussions are private.

It’s intended to enable a dramatic transformation over the next decade for a company that relies on coal to produce the vast majority of its electricity. NTPC is aiming to double generation capacity to 130 gigawatts by 2032 and slash the share of fossil fuels in that energy mix to about half from 92% currently.

NTPC did not immediately respond to an email seeking comment sent outside usual office hours in India.

India’s biggest fossil-fuel tycoons and companies plan to expand in renewable energy with investor pressure mounting on businesses to reduce carbon emissions and as Prime Minister Narendra Modi’s government debates aggressive climate targets. Mukesh Ambani, Asia’s richest man, last month said Reliance Industries Ltd. will invest about $10 billion over three years on sectors including solar, hydrogen and batteries.

NTPC plans to build large renewable energy parks and has secured land for a 5 gigawatt facility in the western state of Gujarat, the official said. It has also signed an accord with state-run oil explorer Oil and Natural Gas Corp. to set up offshore wind power plants, he said.

In addition to the renewables unit IPO, the company will seek to issue bonds and add loans from domestic and overseas banks to fund its clean energy plans, according to the official. NTPC will also consider selling some assets to raise funds.

The company has been raising the scale of its ambition in renewables, recently flagging it had almost doubled its clean energy target and would help develop 60 gigawatts of capacity by 2032. A target to reduce the share of fossil fuels in its generation fleet to 50% compares to an earlier goal of 70%.

Continuing government policy support and tumbling costs of renewables are also offering additional impetus to India’s utilities and fuel producers. It’s now cheaper to build new utility-scale solar capacity in India than to run most existing coal and gas power stations, according to BloombergNEF.

New coal-fired plants are also becoming more expensive amid requirements to add equipment to curb the country’s air pollution.


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