Ladies and gentlemen, good day, and welcome to Adani Green Energy Limited H1 FY 2025 conference call hosted with Investec Capital Services. As a reminder, all participants' lines will be in the 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 that this conference is being recorded. I now hand the conference over to Mr. Anuj Upadhyay from Investec Capital Services. Thank you, and over to you, sir.
Thank you, Neha, and good afternoon, everyone. On behalf of Investec Capital Services (India) Limited, we welcome you all to the H1 FY 2025 earnings call for Adani Green Energy Limited. Today, we have with us the entire management team of Adani Green. I will now hand over the call to Mr. Viral Raval, Head of IR, to introduce the management, and this will be followed by the opening remarks and followed by Q&A. Over to you, Viral. Thank you.
Thank you, Anuj. Good afternoon, all the participants. Thank you for joining us in this call. We have Mr. Amit Singh, the CEO of Adani Green, with us in this call. We have Mr. Saurabh Shah, the CFO, Raj Kumar Jain, Head of Business Development, and I look after investor relations. And also we have Mr. Anupam Misra, who heads Group Corporate Finance. So, without wasting any further time, I would request Amit to start with opening remarks, which will be followed up by Q&A.
Hi, good morning, everyone. Lovely to meet you here online today. I'm happy to announce that AGL has delivered a robust growth across all key metrics last quarter. Our revenue and power supply rose by 20% year-on-year to INR 4,836 crore, backed by a robust capacity addition over the year. Our EBITDA from power supply has increased by 20% year-on-year to INR 4,518 crore, while our cash profits surged by a impressive 27% year-on-year to INR 2,640 crore. This superior performance is a result of our relentless focus on project execution and operational excellence across all our sites. Over the last one year, we've added 2.9 GW of greenfield capacity, bringing our total operating capacity to 11.2 GW as of right now.
Our energy sales increased by 20% year-on-year to 14.1 billion units. Now, one of the most exciting developments is the ongoing construction of the world's largest renewable energy plant at Khavda in Gujarat, which I know some of you have also had a chance to visit. This 20 GW project is set to become a global benchmark for ultra-large-scale renewable energy development at an unprecedented speed of execution. Within just 12 months of breaking ground in FY 2024, we have operationalized the first 2 GW of solar capacity. Now, turning our attention towards the current financial year, 2025, we have made a comprehensive construction plan to deliver in the region of 6 GW scale of renewable capacity.
This includes a detailed planning and execution, mobilization of in excess of 9,000 people during the monsoon periods, long-lead material procurement, balance of plant setup, and several commissioning activities which are ongoing in Khavda. As a result of this, we have already commissioned 250 MW wind capacity with 5.2 MW WTGs. These are the largest onshore wind turbines in the country. Even though the wind plant in Khavda is still under stabilization phase, we have seen a very good CUF of these machines, north of 44% for the last two months that it has been operational. We are forecasting the full-year CUF of wind turbines to be in excess of 55%. The new wind capacity additions on the merchant side, where the price realization in H1 has been very attractive as well.
The CUF expected from our plant in Khavda for solar is expected to be above 32% on a full year basis from next year onwards, which will lift our overall portfolio CUF, which currently stands at 24%. This will further lead to significantly accretive returns to our portfolio. We are committed to our 6 GW capacity addition this year, and our teams are working extensively to deliver the same. I'm expecting one-third of the incremental capacity to be added within this quarter and the remainder towards end of the year. Monsoon, which extended by about a month, has caused some delay, but that is within the 10% variation that we built in the construction S-curve. This 6 GW capacity represents excess of 30% of utility-scale incremental capacity, which is expected in India this year.
Post this capacity, we will have a run rate EBITDA in excess of INR 16,000 crore on an installed base of 17 GW . Now, beyond the current year, we're actively also making progress towards construction and adding capacities in Khavda and Rajasthan. With a minimum run rate of 6 GWs going forward. This further solidifies our resolve to continue to contribute a significant portion of India's utility-scale renewable power as the country requires. Now, let's turn our attention towards business development updates. AGL has received a letter of award for supply of 5 GW of solar power to MSEDCL to a 25-year fixed price PPA. This gives a significant boost to our contracted portfolio.
We have further signed the first PPA agreement to supply 61 MW of renewable energy to power data center as well, which will help advance Google's 24/7 Carbon Free Energy goal for its cloud services and operations system . This is our first step towards decarbonizing the industry, enabling energy-intensive operations like data centers to fulfill their power requirements with cost-effective and clean energy solutions. Over the past two years, battery storage prices have dropped by an impressive 66%, presenting an exciting opportunity to couple these systems with solar plants. This synergy not only accelerates the growth of renewable energy and enhances the efficiency of our transmission infrastructure, but it also unlocks the potential to capture significant price arbitrage in power markets between peak and off-peak hours. We are actively pursuing several opportunities which are expected to materialize in the next financial year.
Our growth is driven by a robust capital management plan that focused on utmost credit discipline. Having delivered the increased capacity growth, we completely redeemed our $750 million bond in line with our commitment, resulting in systematic deleveraging. Additionally, we have strengthened our strategic partnership with TotalEnergies by forming a new joint venture comprising a 1.1 GW renewable portfolio, wherein we have received an investment of $444 million from TotalEnergies. We remain equally committed to maintain the highest standards of environmental, social, and governance practices. AGL is proud to be the first renewable energy company in India to join the Utilities for Net Zero Alliance. We retained our top ESG rankings and the latest achievements by various global ESG rating agencies.
To summarize, we strengthened our contracted portfolio by adding a 5 GW project, LOA, signed the first PSA agreement to power a data center in a very fast-growing space, and also maintained a consistent progress in execution of current year projects across all our sites. Coupled with a solid capital management strategy, we are well on track to achieve the stated goals of 50 GW of renewable energy target by 2030 . Thank you, and back to you.
Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question, may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, you will wait for a moment while the question queue assembles. The first question is from the line of Sabri Hazarika of Emkay Global Financial Services. Please go ahead.
Yeah, good afternoon. So I have three questions. First is with respect to the 6 GW capacity that you've commissioned. So you mentioned 2 GW will be commissioned this quarter itself, and the remaining 4 GW will be towards the end of this year. So we are expecting it to be commissioned towards the back end of March or somewhere between July to Q4 of this financial year?
Yeah, I think these capacities are expected to be commissioned towards the end of the quarter. I mean, these are the construction estimates, which we have usually carry, so they have some deviation, plus or minus two weeks, as you would recognize. But that's our current estimate, barring no other unforeseen circumstances. Yeah.
Right. And once our capacity reaches 7 GW-8 GW, so we have the evacuation also ready, right? Towards, I mean, the phase two could be, like, ready for entire, like, 7 GW -8 GW of our capacity being able to be evacuated, right?
Absolutely. I think our complete forward planning, which we do, we make sure that the first constraint we apply is essentially around evacuation availability. And you know, we work with any of the different companies and make sure that we keep a very close contact and monitor their progress, and we make decisions as we go. But as of right now, until end of next year, we have clear line of sight on evacuation, and none of our projects will face any kind of bottleneck or delays because of evacuation.
... Right. Second question is on this C&I deal that you have signed with Google. So I don't know whether it is like whether it's publicly disclosed or not, but can you give us some idea on the pricing and the tenure of this deal?
Yeah, I think I'm gonna ask our Head of Business to maybe give a few comments. I think we will not be able to disclose, but it's very accretive to our portfolio. But, Raj, why don't you maybe give a bit of a color on that?
Yes, sure. So, we have been engaging with Google, utility players in this field. I would say, the big tech players who has this kind of a huge requirement. And as you know, with the advent of AI and increased focus of some of these tech players in capturing that opportunity, we have become very important for them to put their establishment. And at the same time, we also are monitoring the data policy which is there, which actually gives them additional opportunity to enter in there. So the large space where we are active, this is the first deal which we have signed up with them, which opens up a significant market for us in this area, apart from the conventional players.
This is a long-term deal with them for the supply of green electrons at a attractive price. As Amit mentioned, that's the pricing is something which is confidential, but it is significantly higher than what you would get in normal long-term discount retailers.
Right, sir. When is it expected to commission?
We expect this device to start somewhere in CY Q3 next year.
Q3 of calendar year 2025, right?
Okay. Yeah.
Okay.
Yeah. The reason, I think, is this project is. We are very proud of it, because it's one amongst several projects which we are pursuing in this space. And we're very upbeat on the response we're getting from the market, because we are one of the companies with a big footprint of solar and wind. And also we have very good geographical diversification, which our C&I customers are asking to make sure that we have a very, you know, reliable RTC solution. So we are very uniquely positioned actually to deliver on those aspirations they have.
Right, sir-
And one thing which on this point, Sabri, I would say is what we have been finding with both of these customers is. I think there have been a lot of discussions they've had with a lot of players in the market. But we are finding that execution and the timely delivery of power is a big differentiator, which they value, and that's where our track record really gives them comfort in terms of signing up with us. And with the kind of understanding which we have as a power tech company and the group, we are able to demonstrate them how things would move or seen as a as a solution. And that, again, is a huge comfort when they deal with us.
So that obviously helps us in driving, at the same time ensure that the deals are closed in a manner where it is a mutual one. Go ahead.
Right. Right, sir. Thank you so much. And last question is basically related to financials. So I think, I mean, if you look into a minority interest that's paid to Total JVs and so the share of profits from associate and JV, so those numbers are like sort of fluctuating a lot since the last two, three quarters. So can you give us some guidance on these two line items going ahead, how it looks like turn out to be?
Share of profits increases basically, share of profits which have increased from the associates and joint venture is basically because of our 26% stake in Mundra Solar Energy Limited, where the company has been doing exceptionally well. They are having 2 GW of production line, which they are supplying towards, where there is an export and domestic order book. Because of that, our share, 26%, we are getting a better profitability. On the NCI, the number is because of the operational capacities that are there in Total, which are doing well, and where we have an NCI profit, which we have to share with them.
Just to add to what Saurabh said, so just to clarify, the 26% equity stake that we hold in MSEL is basically as part of the manufacturing link vendor that we have with Tech, and on the other part, the reason why it contributes a major portion is because these are older assets with higher tariffs. And because they are also we have also progressed in the in their project life at a higher level compared to other projects that we have in this pipeline. So from that perspective, it contributes, it looks like it contributes more in the overall profit, but in terms of EBITDA, they are broadly in line with where they should be in terms of the actual asset mix.
Right. And even the minority interest seems to have gone up. If I look sequentially, it has gone up significantly, like Q2 being a weaker quarter, but minority interest have gone up from INR 182 crore to INR 239 crore. So any particular reason, or it's just debt repayment only due to which, the interest costs down as well?
I think that will be the reason why it will keep on going up, because the debt keeps on reducing, because we have a systematic amortizing structure on the debt, so debt keeps on reducing there, and that's why the debt keeps on increasing for those assets.
... So your asset, it will be slightly less because the interest is higher, because the debt amortization has not gone to that level.
So annually, what could be the number on a stable set for this minority interest? Because I think your, I mean, group PAT, that's why has fallen significantly. I mean, even YOY is down. If I look into the PAT of Adani shareholders, then it's down from, say, INR 372 crore last year, to say INR 276 crore. I mean, just from a modeling point of view, just wanted some more color on this end.
In the PAT, because the way of reading the project works is basically it has an amortization structure of debt, and that's why it keeps on, the PAT will keep on increasing through the project life. And since there was a refinancing which happened last year itself, very in December only, so the interest cost keeps on further has gone down. And because of that, there is this number which has gone up, the EBITDA, PAT will be, like, now, they should be in the same range going forward or maybe slightly higher, depending on how the amortization keeps on acting. And the interest rate, the interest cost on an actual basis keeps on going down.
S o INR 240-INR 250 crore could be the run rate we can for the time being assume every quarter? Okay.
Yeah, and then accelerate it, correct. Yeah.
Thank you so much. I'll be back to you. Thanks a lot.
Thank you. The next question is from the line of Puneet from HSBC India. Please go ahead.
Thank you so much, and you know, my question is on another line. If you can give some sense of attributable EBITDA and attributable debt for your 11 GW capacity.
From an attributable EBITDA perspective, it is going to be in the run rate range of about for this year. We are looking at a run rate of about INR 10,800 crores on the run rate side. And on a PAT basis, depending on the capacity which are there with Total, it will be in the similar range from what six months we have reported.
INR 10,800 crore is your share of it out of 11.2 GW?
The INR 10,800 crore is the total run rate EBITDA for the entire 11.2 GW.
What's your-
Sorry, for the JV, what I can do is about INR 2,450 crores would be the EBITDA, which is attributable to the JV partner, based on current operational capacity. Because there are such under construction assets also, so the EBITDA will further increase. But based on the current operational capacity, the number is that much. And that INR 2,500 crore, again, 60% comes back towards my way of the NCI.
Understood. And, I see in last first half, you haven't executed much, I think 200 MW, 300 MW. Any particular reason? I mean, second quarter understandable on monsoon, but monsoon also was weak, and there is not much spillover, which is what will happen in 2Q. Any thoughts there?
Yeah, yeah, I think absolutely. See, we have to keep in mind our run rate, and we do a two- or three-year planning and execution. And what we do is we make sure that we line balance in different parts of the activity in construction phase. So we work on, for example, each of the different elements, whether it is piling, you know, across different blocks, you know, keeping the balance of plant in place. And we want to make sure that we are confident of delivering these things over a two- or three-year horizon. Obviously, the monsoon period, you know, extended by a month, which kind of took away the active working period in Kerala.
But that was kind of budgeted in our overall plan, but definitely it put a bit of pressure on our execution, for the second quarter. But nevertheless, I think, we are fully back up, again, and, we are catching up on any kind of backlog from previous quarter. And, you will see, you know, a gradual delivery of each of these projects, in the next six months. Now, again, I think, we can get a better understanding of some of the weather patterns, but, these, you know, delays will... are normal to such large construction projects. And, you know, in some places we will come ahead and some places it might be slightly behind. We're talking in the, you know, ± 5%, you know, construction risks.
In the 6 GW, how much is the wind and how much should be solar?
We're expecting wind to be approximately around 1 GW and solar to be approximately 5 GW. I'd like to remind you that 80% of the wind capacity is going to go on a merchant market as well. So that also gives very attractive returns to our portfolio.
Understood. That's very helpful. Just a quick comment on your evacuation declines. You said, would it be fair to assume that, you know, the evacuation still left at 27 GW and 2GW, or is it limited to 6 GW and?
No, I think, look, we, we look at evacuation in two ways, right? I think we look at evacuation and land, and we want to make sure that we have availability to evacuate power. So if you look at our overall portfolio level, we have mapped our each of the different PPAs, each of the different projects, and we have a bank, which is in excess of 70 GW. To make sure that we de-risk our evacuation, we look at the progress happening in different, you know, states and different substations. We make sure that we prioritize the projects where we have higher probability of evacuation. In the next two, three years, we have absolute 100% clarity that we are not getting anywhere lost.
Beyond that, I think there are a lot of active projects which are done by our sister company, AESL and Power Grid and other companies, which we are keeping a close watch on. So yes, we would like the transmission lines to come faster. Yes, we would like things to move better in Rajasthan, but as per our 50 GW we have de-risked it completely from evacuation point of view.
50 GW is entirely de-risked now?
Yeah. Obviously, a lot of projects are in flight, as you know, in Rajasthan, Khavda. So they have to happen within that construction period timeline, but the next two years, three years, we are absolutely, you know, we have line of sight. Beyond that time horizon, as you know, those construction projects are in early stages, and those we will gain better confidence as time goes by, but we feel that we will be de-risked to 50 GW.
Okay. And lastly, on the C&I part, Adani Energy Solutions is also profiting a C&I business. Would you be providing power to them, or would you be competing with them? How should one think about that?
No, I think that's an additional opportunity, which we are looking at. I think, depending on, you know, whether it is Adani Energy Solutions or other companies, because, you know, whoever comes to us and looking for large-scale utility power at a good price, we are able to provide. We are not going to go into final last mile distribution, so we are going to look for partnerships, for that, and I think, Adani Energy Solutions is a great partner. These are very much potential for, you know, value creation, for both companies.
Understood. Thank you so much, and all the best.
Yeah. Thank you.
Thank you. The next question is from Nikhil Nigania, from Bernstein Private Limited. Please go ahead.
Hi, thank you for taking my question. My first question is on the short-term power market. Last week, actually, 30% of revenue. If you could throw some color on what share was it in the current quarter?
Yeah, I think, current quarter, I think we have a good portfolio, between 2.5 GW, 3 GW, which is operating, you know, between infirm and merchant. So yeah, we can look at it, out of 11.2. So that's what it is. And I think these projects, you know, these are unique opportunities in different PPAs, which, we are, you know, benefiting from. And, it will kind of evolve in a different pattern going forward as the PPA timelines, get materialized.
Is it possible to quantify it in Q2? How much was it in terms of spend?
The actual, in total, the merchant revenue was INR 1,070 crores.
Thank you. Also, regarding the construction plan for this year, last year was maybe one out of the 6 GWs, 1 GW will be merchant. Does the plan still hold?
Yeah, the plan is still the same. Yeah.
Got it. Thank you so much. The second question I had was something which I couldn't see the presentation, is the future pipeline. So is it fair to assume that about 8 GW-10 GW is the PSP kind, and 5 GW from FDRE on top of that, or has there been any change on that?
No, absolutely. That's the right way to look at it as well, Nikhil. I think, look, I think we are diversifying, and we are not only looking for system PPAs, we are looking for merchant opportunities and C&I opportunities. You know, there are other tenders as well, which we are participating in. So we are keeping a close tab on it, so you know. So that will also get added to our portfolio. So, yeah.
Got it. And just to last on that, just to clarify one point, maybe I missed reading into, is the construction, execution, and commissioning timeline, overall three to four years, renewable business also is it the same or is it a shorter, timeline we have for that?
Yeah, I think the rules of the project that package is close to four years. And it depends on availability of evacuation and other parameters. So yeah, I think we have the LOA, and I think we are making progress towards finalizing the agreements and so on. So yeah.
Got it. Thank you so much. Just last question, and then one. There's a big other financial liability number, which we could see go up to INR 60 crores- INR 2,060 crores this quarter. Could you please clarify what is that element?
I'm going to pass on to Saurabh. Saurabh, you know, we can have
This is primarily on account of the CapEx related liability. It's entirely related to the construction.
Got it. Understood, and one last point. Just, I think it's just to be clear as well, on the non-controlling interest, which went up this quarter. Given the news on TotalEnergies' further investing in the JV of the scope, while it definitely gives confidence of TotalEnergies in the company, wouldn't this number again go up in subsequent quarters, so once that investment?
It will keep on going up. It, in a great project like what happens is the debt has an amortizing structure, so the interest cost keeps on going down through the years. And for this particular portfolio, because for the JV portfolio, if you remember the 2.3 GW s was formed in 2020, and the assets were constructed before that. What has happened is, debt is significantly amortized for those assets. It also has slightly higher tariffs, right? Because it is, these are older projects. So that's why, the contribution, you might think that it, it is increasing. But basically, that's how the renewable project model is built. And this will happen for other projects also in the portfolio that we have, AGL dedicated direct C&I also.
See, two things to note further here. We have been saying that, you have to look at the, the RE project on a TV that are over the life of the project. So now what is happening is, as the debt is being paid, your EBITDA is moving towards, a three or less than three, kind of an average EBITDA. That's what is happening, and you are seeing the impact in terms of higher profitability of the projects which are mature. That's one.
I think you want to see debt to EBITDA, not EBITDA to EBITDA.
Yeah, sorry. So that's debt to EBITDA. Second, I think what is important is from an overall portfolio perspective, the three JVs or three transactions which we have done, is roughly 4,500 MW in terms of capacity. So on a 50 GW, on a fully built out basis, you will have, these guys, this JV, sorry, at, the 2,500 MW. And the attributable capacity there will be 2,050 MW on a 50 GW basis. So obviously, the EBITDA would be broadly around that in terms of attribution to total. And the profitability in long term would also reflect that.
Very clear. Thanks for clarifying. Thank you so much for answering my questions.
Thank you. The next question is from the line of Ketan from Avendus Spark. Please go ahead.
Thank you. Hi, I wonder if you could share me, merchant realizations and merchant market volume, for [audio distortion].
So I think, if you look at the merchant, you know, for the quarter, I think the market has been, you know, you know that, you know, we can sell our power both in DAM and DAM markets. So for the solar, I think it has been around, for Q2, it's around 2.59, and Q1 was 3.11. And for the wind, it was a very impressive, 5.81 for Q1 and 5.06 for Q2. So on a head-on basis, I think the numbers are 2.85 for solar and 5.43 for wind. And, you know, these numbers tend to improve, you know, in the next quarter and the following quarter.
The last quarter was a bit unique because of very high delivery of hydropower into the grid. The numbers were a bit subdued, but that is a bit unique situation because of the summer monsoon. So we're expecting the prices to, you know, recover from and go back towards what they used to be.
Understood. And also, why do you see prices in DAM to be higher? I mean, there's a gap between prices recovered around INR 30 and prices on DAM comes around INR 4.5. So why is there, why are the prices higher in the DAM?
Sorry, we're not able to follow your question very well. There is a bit of a echo on the line.
Sure. Yeah. Sorry, can you hear me now?
If you speak slowly, I think it'll be helpful.
My question is on the price difference, like, in merchant markets on DAM, the realizations are at around about three rupees, and the realizations on PPA is around two point five. What explains the gap?
So I think this is obviously the near-term markets are more reflection of the current demand and supply, and the forward markets in terms of 20-25 years fixed rate will obviously have the assurances being built into in terms of obviously the pricing, the offtake, the credit which you get, and the certainty, which is where developers are offering that at a lower price. These are two different markets and has different risk profile and reward profile, and that's where we have been guiding that we will have a percentage of our overall portfolio in one profile and two other in the closer markets or other part of the capacity. And GTA as per se would be a significant part of our risk.
It's a question of product mix, what someone want to play. For us, we are optimizing that for the share with you.
Understood, sir. Thank you. Those are my questions.
Thank you.
Thank you. Next question is from the line of Nikhil Abhayankar from UTI Mutual Fund. Please go ahead.
Thank you. Thanks for the opportunity. So I wanted to understand whether we haven't seen Adani participating in significant tenders for quite some time, but the activity has picked up a lot in the last 18 months. Should we expect you to participate there? For some of the complex projects, the pricing is very good.
I think we look at each project as an opportunity, and you know-
... We want to be very clear that our strategy is twofold. We want to maximize our run rate and execution, and we want to fill our pipeline of that execution with highly exclusive returns of projects. And when we look at those returns on the projects in some of these complex tenders, as you mentioned, you know, on the face of it, the pricing might look nice. We analyze them in detail, and we make sure that we participate in the ones we can maximize and migrate our portfolio. So, we look at each opportunity in that way, and I want to bring your attention toward, for example, battery storage solutions. The battery prices have fallen quite rapidly in the last six to nine months.
You know, there are a lot of solutions which we are curating, and we are working on quite actively, which you will see. We will be participating both in the market and also in merchant opportunities and maximize our returns. You know, at our utility scale and having the benefit of large-scale projects, availability in Khavda, we have an opportunity to use the nighttime connectivity and maximize our returns. We look at each of these opportunities individually, and we participate where we can add value. We are participating in hybrid, some storage-linked solutions, RTC solutions, and that will be our approach.
Understood. Sir, what exactly are your views on the battery prices? Is it structurally in a downward trend, or do you think that this is a short-term phenomenon?
I think there are two things. One is, it has definitely benefited from what's happening internationally, especially what happened in China, so the battery prices are going to come down. But very importantly, the research work going on, on the battery chemistry to improve the number of cycles of these battery systems will also improve the unit cost of these batteries, so we should look at this, in twofold. One is the material side of things, the cost side of things. The second is the improvement in chemistry, improvement in cathode, which will further increase the cycles and hence reduce the unit cost of a cycle, for battery systems. This downward trend is going to be a long-term downward trend, and this will greatly benefit our renewable sector in India and internationally as well.
So we are very excited. We feel that we will be benefiting from this trend along with some storage projects we are commissioning. And this will absolutely add a you know extra sense of wings to our platform.
Do you think that if there's a downward trend in the battery prices, it means it continues, say, for the next one, two years, BESS will be the preferred choice over PSP, and PSP won't be required at all?
No, I think you should not look at it like this. I think India requires both. If you look at BESS, typically the current price is, what? 12 years, give or take. These battery systems deteriorate quite quickly. And if you look at the unit cost, it is still almost two X on a LCOE basis for green power from a battery system. So PSP can be almost half the price of a battery system. And then you will have issues of battery system after 12 years, you know, how do you dispose them off? And these pumped storage projects have a lifespan of 10 to 100 years. Pumped storage has inertia, brings you know, voltage control, can discharge 6-7 hours straightaway.
So a lot of applications of these storage solutions are going to be different. We are going to maximize both. India needs both, and we will make sure that we take full advantage of that.
Sure, and just a final question. Just as it was a blended tender for thermal and renewables, so are there any more such opportunities available right now?
Yeah. I'm going to pass on to Raj.
So yes, this is something which is an emerging product, and we have seen a lot of interest in that from some of the discoms in the country, because obviously when one helps the other in reducing the cost, and it becomes more palatable as a purchase by the discoms. So that's something which is finding a lot of interest by the discoms, and we expect some of these tenders to gain more traction. And obviously as a group, it is a strength which gives us a much better value for our stakeholders. And we would be having an anchor position in some of these contracts as well.
Understood. Thank you, and all the best.
Thank you.
Thank you. The next question is from the line of Vijayk umar from Avendus Spark. Please go ahead.
Good afternoon. Am I audible?
Yeah.
Yeah. So my first question is on your current capacities. Like, how would the funding happen for these projects, especially from the debt side? Because I believe that financial institutions will enforce or ask for a long-term PPA to fund.
Yeah, look, I think, you know, all the banking institutions and, you know, we work with. They are very happy with our track record of delivery. And, they have understood our numbers. They know our CapEx and our CUF we generate from these plants.
... this gives a lot of confidence to them when we go for merchant finance as well. And, when we combine this with, our existing PPAs, we are able to get a very attractive, portfolio combination of PPA and merchant, which they are very much willing and encouraging us to finance. And, you know, that will continue. And as we progress, that will only grow and improve going forward. So yeah, we, we do a seventy/thirty, structure, twenty/twenty-five structure.
Sure. So who would these financial institutions be? Would it be Indian private banks, or is it like PFC, RECs or is it like, what is it?
Both. Both are doing and both are. Yeah, so these opportunities are both in ECB lenders and also domestic. So everybody pretty much.
Sure. So they're not particular about an asset not having a PPA, is what you are trying to say?
Yeah, I think they have confidence in the Indian market. I think they have looked at Indian market together with us for quite some time. They have seen how the market is responding, the growth of demand, and the confidence we have on the merchant pricing as well. And that kind of further you know underpins our confidence in the market. And yeah, they are with us on this.
Sure. My second question is on, say, the storage. So you mentioned you would be bidding for storage based tenders, and you are also having a pipeline of PSP projects you would want to develop. So what is the plan to tie up on getting power to charge these capacities? Because, if you tie up this to a PPA, you would probably end up paying INR 2.5 for getting a solar power. But, of late, we are seeing in the merchant market or the exchanges, in the afternoon times, the prices are less than even INR 1. So how will this thinking be? Will you buy power to charge these storage capacities, both battery and PSP from exchanges, or you would have to tie it up to a long-term PPA?
So I think, you know, it's a dynamic mix which someone has to continuously optimize. The best part is that we have our own capacity and the flexibility built into that when it comes to RE generation, that we can do our own tie-ups in terms of supplying power for battery as well as the PSPs. And in a lot of cases, also augment that with exchange-based purchases within the same work. Okay, so I guess what will give an additional value to overall returns, which we get out of these projects if we are able to combine some of these capabilities. In terms of tying up, we have again multiple products where this can be used as a storage. It can obviously be given as a service.
It can always be combined with a, you know, peak power solution. It can be combined with an RTC solution. It can be given to a DISCOM or to a C&I, or it can also take a market exposure. So with all these combinations, we look at this whiteboard on a very dynamic basis, and decide on that strategy. We can see those results when we publish our details in terms of the realizations which we have compared to the market ourselves.
Sure. So my final question is on, say, the distribution companies, their, behavior now. So we moved from playing vanilla solar wind to, tenders which, are, like a hybrid. Now, increasingly it is, FDRE or load matching or peak power. Now, do you see there, as a country as a whole, the interest from DISCOMs, is there to sign any of these PPAs without any issues? Or because we are seeing certain PPAs not being signed. And if so, would we go back to again playing vanilla, solar and wind kind of interest from DISCOMs? How is the DISCOMs', behavior and intention approximately?
So see, it depends again, the situation of every DISCOM, which has to be assessed differently. Say, Maharashtra is a recent example where you see the thermal plus solar as a scenario where they tied up large capacities. They have also done some hybrids, and they have also done some battery storage tenders. They have done some recent FDRE ties as well. So it depends on the DISCOMs, how they see their own power mix and how they are seeing the load curves. Obviously, different types of load curves can be has to be catered based on various sources. So, the product mix is something which is not necessarily a fixed product mix, which people will look at, and they will play what makes cheaper power for their own purchases.
So that's the way it will move. You saw a lot of tenders which were happening in FDRE, and we have not necessarily seen significant tie-ups on that, just because the product, in a lot of cases, has not necessarily catered to the need of the DISCOMs. So the bids have seen, the tie-ups have been slow. At the same time, over a period, we expect that some of those will get tied up. Some have got canceled in terms of tenders and ties. Hybrids, again, has seen a slow tie-up, but now they are actually moving towards tie-up. Solar wind has seen good amount of tie-up still, and you will see some of these mix shifts changing.
Now, the recent definition, I would say, is to call the bids around batteries, obviously, because the prices are becoming attractive. So they want to look at big solutions sell independently. There is some VGF scheme behind the batteries, which is also prompting some of the discoms to look at that product. And we have also seen recently PSP tenders. So I think what is important is, as a strategy, the developer, I have to look at and have the idea where the play is something which is de-risked, and I'm able to make more buck on the investment I do. So I think that's how it is to be seen.
And that's the reason you have not seen much in some of the complex products, where we saw that this particular kind of thing may have a limited shelf life in near term. But again, I'm not saying that some product will not come out. It depends on the discom's demand for it.
Okay. My final question is on this recent PSP tender from MSEDCL, where the discom and the regulator seem to fix it around eight point five or eight point seven. The finance is too high, and they put a ceiling of around six point five, if I'm not wrong. Like, how is this economically logical, and how can one deliver at six point five power from PSP, with considering input cost of two point seven? And I don't think, you know, we won the tender, but I'm just trying to understand the rationale for asking to supply from PSP at a tariff of six point five. If that is the case, how can PSP projects make through this?
See, I do not want to necessarily comment on a specific situation again in which a regulator and a discom is involved. However, what is important is PSP has its own merit, and you have seen more tenders in the market, apart from a particular case. I am sure the utility which a PSP provides to a discom is valued. It is, as Amit mentioned earlier, still cheaper than or significantly cheaper than what a battery-based BESS can provide you as a number. So it has a significant value there. And it is a solution which can actually provide a longer-term power. Still, you do not see in batteries where people are tying up for more than four hours of power. But in this case, it can be significantly higher.
So I think value proposition is there. There are multiple discoms which are clearly eyeing. There are actually two tenders which are already there in the market for PSP as a service. We know that some discoms are actually looking to even come up with a three-hour tender based on PSP. So it will evolve. It's difficult to comment on a specific scenario on this call.
Okay. So my final question is on what is, in your opinion, the storage cost per unit from PSP, just the storage cost component from PSP?
So I think some of these numbers, I think, you know, we would rather keep it for tenders. So I think, but, you know, what we can say is that we have access to about a 30-GW scale of different PSP types. These vary, and they are fairly attractive for the market. And, yeah, I think this is a very big opportunity for India, for us, and we will make sure that, as we tie these up, we will share the numbers with you as well in due course.
Sure. Thank you so much, and all the best.
Thank you.
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Anuj Upadhyay from Bernstein. Please go ahead.
Yeah, hi, sir. In the initial remark, you made a comment, stated that Adani Green has a possibility, or in the pipeline to add nearly around 70 GW of capacity. So while we are aware of the 50 GW-55 GW which we had planned over Khavda and Rajasthan alongside the PSP project, are there, you know, incremental land banks which we have acquired or in early stage of planning, which can accommodate the incremental 50 GW capacity? Can you throw some light on this?
Yeah, I think, specifically, I think, as you know, this is a business where land, you know, is going to come very, very handy. And we are actively, both in the process of acquiring and adding to our portfolio, you know, in Rajasthan, in Gujarat. Also, we are looking at different sites in Karnataka, Andhra, and, Tamil Nadu as well, and Madhya Pradesh, for both solar and wind. We want to make sure that we have a diversified set of land banks, and, we want to make sure that we tie them up. Exact details I won't be sharing on this call. I think, as you know, these guys go up as soon as we tell where we are buying. So, we're not going to do that. But, you have to take my word for it.
We have a very strong footprint of land bank already, and we are growing that quite significantly, in parallel.
... Got it, sir. And last question, just a clarification. As you mentioned that the minority interest would keep going up from here. So, we can expect a similar kind of an investment by Total across other projects as well? You know, whenever there is any company requirement, we can expect that kind of an investment keep happening going ahead as well. Is my assumption correct?
Yeah, I think, look, I think TotalEnergies is very actively working with us and in AGL. You know, they're also globally having a similar-- We share the decarbonization ambition which both companies have. And we, you know, as they want to grow their portfolio, this opportunity will remain and maybe they will exercise. I don't want to speak on their behalf, and we welcome that. So, I think,
Yeah, let me clarify. There is-
Yeah.
On today, there is no either side to be able to do this. It is something that, at the right time, both parties will discuss. And, in case, the board of the Adani Green agrees and thinks that is the right thing for Adani Green to do, it will be accepted. But there is no such optionality available in either Total or with us with respect to JV. While the minority interest is growing, it's because there are under construction projects in the JV. As and when they become operational, they'll start generating cash. And Viral had outlined earlier, Viral as well as Raj had outlined earlier, how the debt repayment has meant that free cash flow available from operating activities for the minority interest starts looking bigger. So that's we need to look at this.
We'll add one more point. Whatever is the under construction asset, Total will also be investing the relevant equity for those assets. So I think they will be investing further money. So whatever is to be constructed or is under construction, whatever equity required there. Yeah.
Got it. So that was helpful. Thank you.
Thank you.
Thanks.
Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. As there are no further questions, I would now like to hand over the call to the management for closing comments.
Thank you. First of all, I would like to wish you in advance a very happy Diwali. I hope, you're able to take some time off in this, festive season and, you know, spend time with your family and friends, and summarize our call today. We are really focused on two things, you know, in short, broadly, what we talked about. First, making sure that we deliver on our targets, we deliver on the execution plan we have talked about, not only this year but next year and beyond, and for that, we are making sure that we completely de-risk our planning, procurement, construction progress, and take into account any of the weather patterns which we encounter.
And second, we want to make sure that we maximize our returns, and we continue to improve our returns on a life cycle basis of our projects. So I understand it is very difficult for you to calculate from the public numbers. These ROE numbers we are shooting for always additive to our portfolio and continue to grow. So with that, thank you, and we'll touch base later in the next call. Thank you.
Thank you, Anuj, and investment teams organizing this call. Thanks a lot all the participants once again for participating in the call.