Ladies and gentlemen, good day and welcome to Adani Green Energy Q4 FY 23 earnings conference call hosted by Investec Capital Services. As a reminder, all participants' lines will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note this conference is being recorded. I now hand the conference over to Mr. Anuj Upadhyay from Investec. Thank you. Over to you, sir.
Good afternoon, everyone. On behalf of Investec Capital Services India Private Limited, to welcome you all for the FY 2023 conference call of Adani Green Energy. I take this opportunity to welcome the management of Adani Green Energy, represented by Mr. Vneet Jaain , MD and CEO, Mr. Phunsukh Wangyal, CFO, Mr. Rajkumar Jain, Head of Business Development, Mr. Anupam Mishra, Group Head Corporate Finance, and Mr. Viral Raval, Lead Investor Relations. We will begin the call with a brief overview by the management, followed by the Q&A session. I will now hand over the call to Mr. Phunsukh Wangyal for his opening remarks. Over to you, sir.
Yeah, good afternoon to all of you. At the outset, on behalf of Adani Green, thank you for all of you for joining Q4 FY23 earnings call. As a part of brief remark, actually, I will touch upon four points: capacity growth, operational financial performance, credit profile of the company, as well as a brief touch upon ESG aspects. First, capacity growth. On a year-on-year basis, operational capacity has increased from 5.4 GW to 8.08 GW, effectively increasing of 49%. This effectively means we have added 2,677 MW of PPA capacity. Why I'm highlighting PPA capacity is because in terms of actual AC capacity, our operational capacity actual increase is nearly to around 3.3 GW actually.
In terms of D.C. capacity, this should be around 3.7 GW. During this financial year, we added the largest hybrid project in India as well as in the world, 2.14 MW in state of Rajasthan. Apart from addition in capacity, we during this financial year also signed power purchase agreement for 450 MW of wind project as well as 650 MW of solar project. These are with SECI, actually. This also strengthens our locked-in portfolio and also ensures that we have firm off-take mega arrangement as a part of our locked-in portfolio. In terms of operational and financial performance, first, I will touch upon operational performance. Operationally, this has been a very good year.
If we talk purely from a solar portfolio perspective, our solar portfolio CUF increased by 90 basis points on a year-on-year basis, actually. We have CUF of 24.7. This is much better than what we have initially estimated, actually. This is also a reflection of improved operational performance, plant and grid availability, as well as seamless integration of SB portfolio as a part of our suite. That's on a solar side, actually. As I talked in terms of capacity, now, during this year, our hybrid portfolio also started getting operational. Okay, this was not a full year of operational for hybrid capacity, but despite that, our hybrid capacity has a very high CUF of around 35.5%. We expect that with full plant operationalization in this financial year, this CUF also would be on a higher side.
In terms of sale of energy, there's been an increase of 58%, in terms of million units, 14,880 million units is what has been generated during this particular financial year. This is largely on account of higher operational performance as well as greenfield addition of 2.67 GW, which I talked about. Revenue from power supply also increased in line with the capacity growth. In this financial year, we have a revenue from power supply increase of 45%-4%. This leads to INR 5,825 CR of revenue, actually. Mind you, this all excludes the informed revenue which we generated during the financial year. During the financial year, we generated informed revenue around INR 1,854 CR.
From a EBITDA perspective, we retained a very high EBITDA margin of 91.6%. This has been consistently achieving this high market-leading EBITDA margin. From a cash profit perspective, it's been a very good year. Cash profit increased by 72% to INR 3,192 CR. What it effectively means is, as I said, our hybrid portfolio was operational only for a partial part of the year. Purely on a run rate EBITDA perspective for 8.08 gigawatt, we are today talking about a run rate EBITDA of INR 7,505 CR, which effectively means net debt to run rate EBITDA of around 5.4. Now, coming to our credit profile, our credit profile of our portfolio.
As you know, our portfolio, a significant large part of our portfolio, nearly 86% is from sovereign and sovereign equivalent. Even from our balanced portfolio perspective, as far as receivable position is concerned, it is completely monetary current, actually. All of our monetary off-takers rather monetary today are making payment on time. This is a very important development. Secondly, 97% of our credit facilities today are rated between A to triple A monetary equivalent credit rating scale. This clearly monetary shows that credit profile remains very robust, smooth and in line with what is being consistently guided upon. During this financial year, what we have also achieve this, you know, because we, so during our last earnings call, we talked about some of the favorable orders which we have received, especially for our Tamil Nadu Kamuthi project actually.
During this quarter, what we have achieved this was okay. We have actually realized the receivable from the Tamil Nadu, actually. This is, this largely includes around INR 748 million CR. This is a combination of revenue as well as late payment surcharge, this will have a recurring positive impact of at least INR 90 crore. Last but not least, very important element, ESG side. As you know, Adani Group is fully focused on a ESG principle, actually, our framework is in line with globally accepted principles. Apart from that, our disclosure are also in line with various globally accepted disclosure standard like GRI Standards, CDP disclosure, etc. During Q4, few of the notable achievements which is there.
First is now our entire Adani Green portfolio, operating portfolio of more than 200 MW is today water positive. This has been certified by DNV. Apart from this, our entire operational portfolio is today single use plastic free as well as zero waste to landfill, and this is being third-party certified also. During this quarter, we also received the prestigious Platinum Environmental Award at Grow Care India Environment Management Awards 2022. What it effectively means is we have been able to maintain or rather achieve best-in-class ESG rating, whether it is from Sustainalytics, CSR or DJSI, S&P Global Corporate Sustainability Assessment.
In conclusion, I would like to thank all of our stakeholder whose contribution has been very immense in terms of achieving the operational capacity as well as the performance which we have achieved during this financial year. Thank you. That's it from my side.
Thank you, sir. Sir, should we now begin the question and answer session?
Yeah, sure.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask question, please press star one. I'll take our first question from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Good morning, sir, and congratulations on a very, very good year, especially in terms of new capacity addition. My first question is, how should we see the new addition in FY 2024 and FY 2025? Can you broadly lay out the CapEx required and broad funding plan? How do you intend to raise the debt, rupee or, you know, are you looking to raise a U.S. state loan or rupee term loan?
Yeah, sure. In terms of, in terms of our growth aspiration for this financial year, this will be broadly in line with what we have achieved in the last financial year. Irrespective of the fact that, okay, our operational portfolio has increased from 5.4 GW to 8.08 GW. Broadly, we will be talking about the same numbers of 2.6-2.8 GW for this particular financial year. This also includes a part of the capacity which is anyway in very advanced stage of completion, actually, which we believe should be operational will be during this quarter itself.
If we exclude around 400 MW or 450 MW of such capacity, we are in terms of incremental capacity, we are talking about between 2.2-2.4 GW of fresh greenfield during this financial year. Now in terms of CapEx, actually, what it effectively means is, we are talking about CapEx between INR 14,000-14,500 crore. And this includes both solar as well as a small part of wind fleet. That is more from a CapEx perspective, actually.
Now in terms of financing tie-up, okay, as we guided in our last quarterly call, as far as our equity is concerned, if you really look at 8.08 GW of operational portfolio. This is throwing a reasonable amount of free cash flow as well as if you can see our cash balance at the end of March-end, you will find that, okay, our unrestricted cash itself is more than sufficient actually. From a equity perspective, no issues per se. From a debt perspective, actually, okay, as we guided in our last quarterly call, it will be a combination of domestic as well as construction facility under the framework agreement which we have put in place.
We are in advanced stage of, tying up our project finance facility rather, okay, a part of our greenfield facility, we have already received indicated term sheet. From our perspective actually, okay, what we are, what we are targeting is, okay, if between the end of Q1 and mid of Q2, we should be able to achieve the financial closure for the incremental capacity which we are talking about.
broadly, what is the kind of debt amount you require, sir, to fund this?
Yeah.
CapEx? No, sir.
usually-
What is the amount you are looking to raise?
Yeah. I think usually these projects are funded at debt equity ratio between 70/30 to 70/25. That is the range which we are talking about. As you know, from project to project, okay, we'll get that amount depends upon the cash flow pertaining to that. Between 70/30 to 70/25 is the range which will be there for the CapEx which we have guided.
Secondly, sir, is there any update on how you're thinking in terms of portfolio? Are we looking to reduce our activity in new bidding or acquisition for time being? Because we haven't seen you participating in any new bids. Is this the?
Yeah. I think, as I think we also indicated last time in our call, we have a large pipeline of under-construction projects where we have significant flexibility in terms of their execution timeline. For the projects to be commissioned in the coming year as well as a good part of next year, we already have significant capacities tied up. We are focusing on value accretion opportunities and will time those as it comes by. We are not necessarily aggressive right now in the market.
This is it. Thank you. I'll get back in the queue. Thank you.
Thank you. We take the next question from the line of Puneet Gulati from HSBC. Please go ahead.
Yeah, thank you so much for the opportunity and congratulations on, you know, good execution. Can you give some sense of what kind of CapEx did you spend on the wind and the solar capacity separately for fiscal year 23?
Yeah. Fiscal year 2023, actually, if you see our cash flow, we are broadly talking about around INR 6,000 crore of CapEx, actually. Yeah. That is what. And in terms of the bifurcation, okay, around 20% should be.
No, no. Hi, this is Vineet here.
Yeah.
See, as mentioned by Prunsat few minutes back, we will add around 3 GW in this financial year, in the coming financial year. Out of this 3 GW, approximately, around 400 MW would be wind and the remaining will be solar. In the earlier, Mohit asked the question about the financial year 25 also, how much we are planning. As per our present, you know, the planning phase, approximately 5 GW we will add in the financial year 25. There will be a combination of around 700 or 800 MW wind and the remaining will be solar.
For FY 2023, if you can give a sense how much did your wind project and solar project cost, if at all on the, roughly on per gigawatt basis, et cetera?
Yeah, sure. I think, so we see that FY 2023, we had a lot of projects which were being built over a period of time. We finished a lot of projects last year out of the 2,667 MW, which were under construction at the end of FY 2022. That is the reason the number of INR 6,000 crore is not necessarily reflecting a 2,667 MW build out. In terms of capacities, as I've spoken, as we have spoken, close to 2,000 MW odd of hybrid projects were added last year, and the balance were balance from small capacity was solar and some, 200, some 325 and 100. Close to 400 odd megawatts was wind. Yeah.
Yeah. In terms of capitalization, if you can give some sense, you know, how much did it really cost you on a per megawatt basis? Did it change materially from the previous years?
I think the specific number, I think the team can come back, but the cost was around INR 7 crore odd for the wind.
Okay.
For solar, it was INR 4.7-4.8 crores per megawatt. Yeah. This is inclusive of the taxes and duties, including GST and all. Yeah.
Yeah, yeah, understood. What is it that you're looking right now for the current fiscal year 2024?
Yeah. Including, the now this year, the lot of CapEx which we are doing has a change in law pass through. If we take out that, we are talking about since all the projects are with the trackers, the solar cost would be around INR 5 crore odd for the solar projects per megawatt. Wind we are talking around INR six and 1/2 kind of a number.
Okay. What kind of PLA will the solar throw now with tracker?
We are talking about the 350 CF ranging between 33 to 33.5 kind of numbers.
Yeah. I think, with just to point of attention is I think as you know, renewable projects CF is also dependent upon the location where you are setting up the project.
Yes.
CF, which my colleague is talking about, is based upon our capacity growth plan for this financial year, which will be towards most of our capacity will be set up in the state of Gujarat, actually, which is basically a place where you have higher CF. With trackers, as I said, between 33% and 35% actually.
Understood. Can you also talk about your thoughts on the wind PLF? It was lower this year versus the previous. How are you looking at wind projections, and is it materially impacting your existing returns from the wind projects?
I think, two things. One, as has been highlighted earlier, one big drag on our performance last year was a one-off event where 150 MW of our operational capacity was down, and that has actually impacted the overall wind CF significantly. That has been restored and those turbines are now working fully. Second good thing which is happening is the capacities which were earlier of turbines which were of a smaller size, old technology, that as a percentage of our portfolio is reducing. Going forward, we are implementing significant capacities in high wind areas like Khavda and all, Khavda and Western Gujarat. We expect the CFs of our portfolio will be going forward better.
We're also implementing some of these projects with the largest wind turbine in India, which is being made by Mundra Windtech. That again will give us better economics. We believe our wind portfolio would be giving us reasonable returns. However, we are generally very conservative when we do an estimate for returns purpose for wind generation.
Sorry, you said wind turbines coming from Mundra Windtech?
Yeah. That's the company which is developing 5.2 MW wind turbine, which is the largest wind turbine in the country.
Okay.
Suitable for high wind speed areas, which is what we have in Western Gujarat, specifically more in Khavda.
This is the Adani Group company?
Yes, it's an Adani Group company. Yes.
so I think when we were talking about split between solar and wind.
Yes.
for this financial year, anyway, a large part of our capacity will be more of the solar, actually. Wind will be, what I can say is between maybe 260, around 260 MW of wind, which will be implemented by us in this financial year.
Understood.
That's okay. This is not a reflection of our view about the wind per se, actually, but it is more to do with how capacity wise we are implementing our portfolio.
Right. Right. That's a little. Lastly, you know, while you did allude to the fact that you have a large portfolio still to implement, would you have any thoughts on, you know, how you're looking at round the clock projects? I mean, you have hybrid. How difficult is it to execute round the clock projects, and what are your thoughts on recent bids?
Yeah, sure. I think this is one area of the market which has been evolving. We have been working through various industry associations on how to evolve this part of the market in India, given the fact that, yes, India would see requirement of a more handling more variability of wind and solar power going forward. These RTC-based solutions are the one which makes it happen.
There are multiple ways this can be done. One, obviously is tying up with the pump hydro and battery storage, or in some cases, we can tie it up with the flexibility available within the thermal generation. There are those multiple ways. We are very much glued to it and we will be tapping the market when we believe that the market has matured. Right now, I can only limitedly say that the current bids are something which is more an evolution right now, not necessarily a settled way of doing this. There is few such experiments which are on, but this is one area which will be important for the renewables industry going forward.
People who are doing pump hydro seems to be, I would say, having a longer-term visibility there. That becomes a key area to focus on.
Understood. You also had plans for pump hydro. Will that come under Adani Green or Adani Enterprises?
Yes, yes. That's the reason I was mentioning that pump hydro becomes a natural play for some of these kind of things. We are looking at pump hydro within Adani Green.
Within Adani. Okay. That's it. Thank you so much and all the best.
Thank you. A reminder to participants, if you wish to ask a question, please press star one on your touchtone phone now. We take the next question from the line of Nikhil Nigania from Bernstein. Please go ahead.
Thank you for the opportunity. First follow-up question is on wind PLF. Even in Q4, the wind PLF was down at 20.4%, although as I understand, the entire capacity was operational then. Any particular reason this is happening, and what would be a P90 wind PLF for the existing portfolio?
First question first, and then let the team give the second number as well. See, I think traditionally also, if you look at India, you would see that the wind speeds are significantly lower in the last calendar quarter of a year as well as the first calendar quarter of a year, because in India, winds are generally monsoon driven. Except in southern part of India where you have written monsoon as well. Our portfolio is largely focused on Western India, which gives much more wind starting second calendar quarter of a year. Second and third quarter becomes more, I would say, important for wind. You would see that pattern of generation year-on-year in most of the portfolio which are Western India based.
If you are southern India based, you would have some pickup in November, December as well. That's it.
This is not too far from our estimates. I think from a P90 basis, we have a number?
Yes. The P90 is not readily available with us, Munki. What we will do is, Munki, we will separately connect and then share with you, Munki. Yeah?
Sure. Yeah. Appreciate it. Got it. The second question I had was on inform power sale, which had been a big support to deleverage the balance sheet. Now almost the entire quantum of capacity which was selling in the short-term market is commissioned with the last hybrid plant coming in. What is the view on that for the coming fiscal?
Yeah. I think it's a very fair, Munki, question. But I think, Munki, during my opening remarks, what I also wanted to highlight was in this calendar year, we will be talking about approximately 2.8 gigawatt actually. And I said that a part of that capacity anyway is in very advanced stage of implementation. So what it effectively gives us is, okay, there will be another set of projects on which we can leverage upon it and generate informed revenue. So informed revenue is basically, as we have explained in the past actually, in terms of preparedness of our portfolio. So from our perspective, we have another set of portfolio which will be available, which will, okay, help us in generating informed revenue.
Now, quantum and all can vary between year to year, but informed revenue as a source of additional value creation will continue to remain as far as, Munki, our portfolio is concerned.
Yeah, sure. I think.
This year, as we moved into this year, I think we have, close to, 300 and what?
Yeah.
400 odd megawatt of projects which are nearing commissioning.
Yes, sir.
There, you will see the informed revenue coming in as we see, as we move in. As we implement this additional capacity which Phuntsok just spoke about, additional 2.2-2.4 gigawatt, apart from this 400 MW which I just mentioned, that will start kicking in informed revenue for us in this year. I think, you will see informed revenues as we move ahead.
Got it, Phuntsok. Thank you. One more question around this. There's a CWIP number of INR 5,291 crore on the balance sheet. Does it correspond entirely to the under construction capacity or some of it is also for the recently commissioned hybrid capacity?
No, no. I think, Munki, this is entirely for under construction, Munki. Those which has been, Munki, commissioned, hybrid has already been capitalized actually.
That's already been capitalized. Understood. Understood. Got it. And then my other question was around the debt situation. The Holdco bond, it was good to see the yield rates come down to 12.5% or so now. What is the plan on that going forward? Yeah, any plans for further fundraise, which was in the news?
As far as, Munki, the whole core bond is concerned, I think plan still remains in line with what we guided during our, Munki, last quarterly call. Our plan remains that, okay, by the end of this, Munki, by the end of this quarter, actually, we will come back to the market with a firm takeout plan as far as, Munki, whole core bond is concerned. As we have stressed in the past actually, legal obligation on us to come out with a refinancing plan as far as whole core bond is concerned is, Munki, okay, Munki, still some time away. By the end of this quarter, we will be coming out with firm refinancing plan for whole core bond. Our plan still remains on track, Munki.
Got it. Understood. Thank you. Those are the questions I had. Thank you so much.
Okay. Thank you.
Thank you. We take the next question from the line of Nirav Shah from GeeCee Investments. Please go ahead.
Yeah. Good afternoon, sir. Sir, am I audible?
Yes, we can hear.
Yeah. A couple of questions. Vineet, sir, mentioned that FY 2025, the target addition is close to 5 GW. Related question is, the CapEx will be close to INR 27,000-30,000 crore on this? The exit EBITDA for the FY 2024 and 2025, what is the likely number for the exit EBITDA impact?
As far as FY 2025 is concerned, I think the capacity which Vneet ji mentioned was more in the nature of our plan right now actually. I think we will give a guidance on it as and when it is firmed up. As far as FY 2024 numbers are concerned, as we said, we have around 8.08 gigawatt, plus the incremental capacity which we are adding. If you are talking in terms of run rate EBITDA, we will be reaching run rate EBITDA of around INR 10,800 crore. That is 8.08+ the incremental capacity which we are talking for this financial year.
Got it. Yeah, got it. Sir, the second question is, I mean, pertaining to the execution of wind projects. While not much of addition will happen in this current financial year, I just want to understand that what percentage of our equipment sourcing for the WTG will be sourced from our group company? Have you started getting orders or it's more of from the-- the logistics will be-- which we will win right now on your own?
I think two things. One, out of the capacity which we are adding, there is a carry-on which is 300 MW, which is not sourced from the group companies. That project is nearing commissioning. That 300 MW wind is coming up very soon. There is another 260 MW, which is custom made, I would say custom made machine for our side. From that perspective, we'll be buying this 260 MW in this year. For our project in Khavda, as per the current plan, which has some flexibility built into it, but yes, this is what we are currently envisaging.
Okay. Just the last question is: What's the Holdco debt as of March? Close to INR 5,800 crores, I mean, remaining unchanged from December levels?
No. Holdco debt still remains at $1,050 million actually. This is that Holdco bond which we issued.
Okay.
Yes. Nothing changes on that one.
Nothing changes. Got it. Got it. Thanks, sir, and all the best. That's my side.
Thank you.
Thank you. We'll take the next question from the line of Girish Achhipalia from Morgan Stanley. Please go ahead.
Sir, thanks for the opportunity. A little admin in nature. This refinancing or repayment on FY 25, which is a slide we are talking about where we have the chart of INR 22,454 crore. Just wanted to understand that construction facility and other ECV, is that already refinanced, or how does that work? You are just looking to refinance the Holdco bond, is it? The RG1, I mean, how should one think about the other parts?
Yeah. I think that includes two elements actually. One is basically a Holdco bond, which we talked about. As far as RG1 is concerned, as we have given guidance in last quarter actually, RG1, we will be taking out through our long tenor bonds actually. Discussions are already underway. Right now, as we speak, we have unsolicited offer equivalent to or either more than our outstanding RG1 portfolio. Since those are still not firmed up, okay, as we have guided, actually. We, once that is firmed up, we will be coming back. RG1 will be taken out through long tenor bonds, actually. As far as construction facilities are concerned, we still have some time actually.
FY 20, FY 25, rather okay. Legal obligation for construction facility is not FY 25, it is FY 26. We have the ability to take out the construction facility earlier than that. That is why it is being shown out here.
Most likely that will be in FY 2026.
Yeah.
INR 10,200 crore.
Absolutely.
Okay. Sir, you said that we are adding this 3 and 5 GW, roughly, let's assume INR 6 crore. The incremental borrowing, because right now, if I look at your debt schedule, I think you have not spent a lot on your under construction assets. Only INR 1,700 crore is on the under construction portfolio. The incremental drawdown, you know, how do you propose to fund it? It'll be USD bonds, rupee loans? Can you shed some light on that?
Yeah. I think this question was asked in the beginning also. As I said.
Sorry. Yeah, make sure. [crosstalk]
Yeah. Maybe I can again clarify. No issues. It will be a combination of domestic facility, because as you know, we have got excellent relationship with specialized financial institution as well as domestic market. We have a framework agreement under which a construction facility is drawn upon. This incremental facility will be a combination of both domestic as well as construction facility. As I indicated, for a part of it, we have already received the indicated term sheet, actually. Anyway, by the end of this quarter or by the mid of Q2 actually, entire incremental capacity will have financial closure in place.
I just want to stress upon one fact actually, because we actually are not in a hurry to achieve financial closure because as our stated capital management plan states, our philosophy is okay, we have right now in place $1.1 billion of non-fund-based facility. For solar projects, a larger part of the capacity is basically solar module actually, and the obligation to put in place LCs, performance securities for those solar modules will come towards the end of June or beginning of July. From that perspective, no immediate trigger per se to achieve financial closure. As a matter of prudence, actually, we want to have financial closure as early as possible, which as I said, by mid of Q2, entire financial closure for the entire incremental capacity will be in place. Hope it clarifies.
Yeah. Just one small, you know, basic question. We've got 20.4 locked in. Incrementally from eight, you're guiding for eight, so it leads us to 16. You know, are we having some time overrun here? Like, where are when are you actually supposed to deliver on the balance capacities, under the PPAs? Like, I mean, just to understand your roadmap, a little better.
I think a very valid question, and just to understand the good part about our portfolio is a large part of it. Out of the 16, if you talk about close to eight is something which where we have flexibility in terms of our timelines to commission. Which is basically we won that manufacturing link tender, which allowed us to implement that over a period of five years. We can always accelerate the execution of that if the transmission permits, and in some cases, we have the flexibility with respect to transmission. That is where it gives us significant flexibility in terms of execution.
If we talk about 2.8 kind of a execution this year, then five, close to five or whatever number which we do guide later for the next year. You know, we are taking away the risk out of the portfolio, and then we are left with the flexibility. For us, FY 2025, 2026, we are almost tied up if we really want to finish all this portfolio. At the same time, it gives us flexibility that if I want to win a bid, which is something that I believe that is good for me, or if I want to tie up something with 1/3 party, I can do so within my own portfolio and flex this capacity addition as desired.
That is where we are not necessarily concerned about the execution timeline for some of these projects. There is also some delays from the side of CTU in construction of some of the evacuation infrastructure for some of these projects, which has again given us some more flexibility in terms of the execution of these projects.
Okay, thanks.
Thank you.
Thank you. We'll take the next question from the line of Siddhant S from Avendus Spark. Please go ahead.
Hello sir, can you hear me?
Yes.
Sir, I basically have two questions. First one is, what is the amount of auctions that can be expected at the country level from SECI plus states?
Yeah, sure. India has that target of 500 gigawatts of renewed capacity by 2030. As recently announced by the government, their expectation is that they will come up with auctions of close to 50-55 gigawatts a year. I think if that pipeline is maintained, then there is significant capacity which the country would add, and it has sufficient room for all the players to increase their portfolio.
Sir, how realistic is that and what can we expect for FY 24?
You know, it's crystal gazing if you are asking me that. We expect that there will be heightened auction activity in the coming year, just because there is some moderation in the overall equipment supply environment, which has actually, which has actually led to some delays in auctions. Yes, 20-25 gigawatt is a good conservative assumption to work with for this year.
Okay, fine. Sir, my second question is that what are the challenges for project execution at present?
Sorry, I missed your question.
What are the challenges for project execution that you're facing currently?
I think, if you're asking us, I think we have over a period of last four to five years have worked to resolve all the issues which a normal generator would see as key challenges, one being the land, second being the execution. As you can see in our presentation, we have control over INR 2 lakh acres of land. We have been able to secure connectivity. The two bigger issues are solved. However, on a three to six months basis, if you look at, yes, both has to be timed in a manner whereby the evacuation system actually develops. To that extent, plus minus happens.
For us in terms of equipment sourcing also over a period of last three to four years, we have worked in a manner whereby equipment sourcing has also been solved. From Adani Green perspective, we do not see per se a big issue. Most of our even the PPAs have been tied up, so that risk has already been taken out. That's where it is. Now, in terms of industries, the question is, yes, the biggest issue still remains land and evacuation.
Sir, if I have time to squeeze in one last question? Sir, according to CEA, 55 GW of projects is under construction and majority of them have not signed PPA. Is PPA an issue, signing PPAs?
I'm not sure about this data. Seems to be dated. PPA signing has taken time. It is not as desired. We have seen SECI taking or these guys taking close to six-eight months while tying up the PPAs. They have been working on resolving this. In some cases, at least we are seeing that they are tying up the PPAs. They are tying up the PPAs prior to coming up with an auction by doing MoUs, this timeline is reduced. Also understand the fact that as per the current guidelines, it also requires regulatory approvals. That also takes some time. After a bid is called, six-eight months time is natural if you have an auction of close to 20-25 gigawatts a year.
You will have a natural untied PPA of 10-15 GW in the system at any point in time.
Okay, sir. Thank you, and all the best.
Thank you.
Thank you. Anyone who wishes to ask a question, may press star and one on your touchtone phone now. We take the next question from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Yes, thanks for the opportunity once again, sir. Sir, my few bookkeeping question. What is the gross block at end of FY23?
Just one second. Yeah, gross block at the end of FY23 is around 52,530.
Sir, what are unsecured loan with the loan from the promoter entities at the end of FY 2023?
A loan from promoter entity.
Related entity. I think the last year, the standalone books, there were INR 6,000 crore, which are pending from related parties. Yeah.
No, no, no. No, no, absolutely not. As far as March end is concerned, loan from related party is INR 1,200 crore.
INR 1,200 crore. It is reduced. Okay, understood, sir. On the notes account, there's a mention that you have one of the SECI wind project, I think we have returned back and we have paid liquidated damage of INR 56 crore. This pertains to this quarter or this pertains to, you know, the earlier quarters?
This pertains to last quarter.
Oh, last quarter.
This pertains to the this quarter where we were having an issue with SECI got culminated at the beginning of this quarter, I would rather say. LD was obviously a consequence of that issue. That is how this has come in.
Which SECI tranche, sir? SECI tranche wind project.
We had a 300 MW PPA with SECI Tranche 5 where we were facing issues in terms of the force majeure issues which were not settled between us and SECI and which led to termination of the PPA.
Is this project up or we have canceled this project?
No, no. Obviously we had invested money in this case. We have decided to keep that project alive, and that has been revived. There is no cost to us in terms of the project cost incurred, and this would be implemented and it's under implementation as we speak. This will be commissioned in the current financial year.
Understood, sir. Lastly, sir, what is the carbon credit pending with us which can be sold? Last year was very heavy, very large number.
See, the way you look at it last year when we said that was a revenue which we quoted. If you say pending carbon credits, we have a generation of carbon credits happening every quarter based on the real generation of the electrons. We are expecting that we'll be able to do a similar number or slightly better than that in the FY 2024 as well in terms of revenue. Yes.
Understood, sir. Thank you, and best of luck. Thank you.
Thank you.
Thank you. We take the next question from the line of Nikhil Nigania from Bernstein. Please go ahead.
Yeah. Thank you for the opportunity. Just a couple of questions. One, there is another 2 GW of solar manufacturing link tender, which was won, but the PPA is not signed. Any reason that it is still not done?
Out of the 2 GW which you have, 234 MW is in the last bits of signing. We should have it signed any day as we speak. We are just waiting for the people to be there, signatories to be available. That will bring it down to some 1,800 MW. There is, on the balance 1,800 also there is a significant developments which are there. We expect that the matter, in terms of signing of the balance 1,800 should also finish in 1/4 at best, four-five months.
Thank you. That's helpful. The second question I had was again regarding debt side. Any fresh, I mean, fundraise on the debt side which has happened post-February? If yes, what would be the cost of borrowing for that new debt raise?
Yeah. We did actually for one of our project, okay, we achieved the financial closure. Entire sanction as well as entire documentation disbursement happened post from February, actually. From our perspective, we are not seeing any increase in intereT rate. That financing was done at 9.1%, actually.
Thank you so much. That's it. That's all I have. Thank you.
Thank you. We take the next question from the line of Anuj Upadhyay from Investec Capital. Please go ahead.
Hi. Thanks for the opportunity. Sir, if I see your presentation and we see only around 600 MW of hybrid projects which have been highlighted out there. You mentioned in your opening remark that, you know, hybrid projects are something which the DISCOMs are favoring us on date. Any comment on this front, sir? Because of the total 20 GW of capacity which we have planned over the coming two or three years, we are seeing only 600 of this among the hybrid. Is my understanding correct, or there's some kind of a mismatch out here?
Yeah, you're right to the extent that, yes, I have close to 16 GW of capacity to be, I would rather say from a PPA perspective, 12 GW of capacity to be implemented because eight is already implemented. Within that 12, I have close to 600 MW of hybrid three project which I need to implement, and that would get implemented over the course of next 2.5 to two years' time. That's the current tied up hybrid capacity. As I mentioned earlier that we have significant flexibility in terms of being able to tie up additional capacities where I make additional delta for the shareholders. From that perspective, I have that flexibility available. The Khavda site provides me a significant flexibility doing that.
Now, with the event or I would say with the more focus on the RTC kind of or I would say, more, higher CS kind of beds, the hybrid size has to be utilized in a manner that those give you significantly additional delta. That is what we will be focused upon. Our strategy around pump hydros is something which will significantly help us in doing that. You would see some of those being crystallized as we move ahead. Right now, as I said earlier also, for this year, next year, we do not necessarily need lot of main line, streamline, plain vanilla projects. We already have them. We would add as we get more alphas.
Okay.
Yes, from a focus perspective, we are clearly focused on that. We would be doing more variable management as our product strategy.
Okay. Lastly, sir, as we have seen, recently that with around 17-18 GW of tendering and auction, still SECI finds it difficult to sign a PPA, in a timely manner. Now, with the MNRE's direction that they have to come up with close to around 50 GW of capacity, I mean, I'm combining everyone, SECI, NTPC, NHPC, SJVN and everyone. I mean, how can things could work out in terms of signing PPA? Are DISCOMs in a position to sign so much of a PPA in such a short period of time, or do we see some kind of difficulty over there as well?
I think there is a clear focus at MNRE, MoP level. How do we resolve 2 or 3 big fundamental questions with respect to one, in the traditional solar wind PPAs, how that capacity is tied up. If you look at, one issue is that, please, ma'am. Plain vanilla solar bids have not necessarily got very quick PPAs because the expectations of the DISCOMs has been to optimize that last 10, 15, 25 hours. When they see the track prices going up, they quickly sign the PPAs. When they see prices coming down, then they don't sign the already options PPA, and which takes time. That is a reason. There is also a regulatory question, which I mentioned in my earlier answer. That has taken some bit of time for solar.
Wind has not necessarily seen delays in signing up. At the same time, wind per se is becoming more and more costlier in the ecosystem because of the not very good wind sites being there. Wind has not seen significant delays in signing the PPAs. I think from the overall perspective, that is the reason. From a solutions perspective, the move towards hybridization or move towards RTC makes it better. That is where, again, government is focusing, and you are seeing a lot of those kind of bids coming in.
It's a chicken and egg story to some extent, but, I think, as we find more solutions around the peaks, you will see more acceptability of tenders by the DISCOMs because they are seeing what is the value add which it brings to them.
Fine, sir. Thank you.
Thank you. Anyone who wishes to ask a question may press star one on your touchtone phone now. We take the next question from the line of Apoorva Bahadur from Goldman Sachs. Please go ahead.
Hi. Thank you for the opportunity. Two questions. Firstly, on the informed revenue, I mean, quite frankly, it's commendable what we have done. Just wanted to understand what we are doing, which others are not able to replicate. Right. We don't see this informed revenue coming up with any of your competitors' numbers. Second is with the group entering on a large scale in both solar and wind manufacturing, will it make any sense for Adani Green to sort of start outsourcing its EPC arm as well, right? To provide service to other developers which want to set up solar projects or wind projects.
On the first question regarding informed power, I think that is where the expertise comes into the picture. You know, we look at constantly how the evacuation system is evolving, what are my COD dates, and how do I plan my projects in a manner whereby I am commissioning the projects prior to their legal COD dates, which then in terms of those PPAs gives me that flexibility. There are obviously players who in the market are struggling to put up the projects, so obviously, they will never have that informed power kind of a gain. But based on our own capabilities, we are able to put the projects prior to their COD in most of these cases and are able to take this informed power gain.
That is basically the capability coming into the picture. The second question was.
Outsourcing of EPC.
Outsourcing of EPC. I think the AGEL's focus and has been to actually do mainly projects for itself. It has a lot of it on its own plate, and I think, to a great extent, it will be able to build its own value for itself, then actually doing EPC and build value for others and take those obligations. AGEL has not been involved or doesn't want to be involved into the EPC right now for.
Any third party.
Any third party.
Understood. Thank you so much, sir.
Yeah.
Thank you. A reminder to participants, if you wish to ask a question, please press star one now. Thank you. As there are no further questions from the participants, I'd now like to hand the conference back over to the management for closing comments. Over to you, sir.
Thank you to all of you. From our side, actually feel free to approach us. We will be more than happy to address any further queries from our side. Thank you to all of you for participating in the call.
Thank you, Investec, for organizing this call. Thank you, Chorus, for hosting the call. Feel free to reach base with us, if you have any further questions. Thank you.
Thank you very much, sir. Ladies and gentlemen, on behalf of Investec Capital Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.