Mytrah Energy have announced plans to raise between $200m – $400m to finance the expansion of their Indian wind and solar projects. $100m will be used to pay an early investor who is leaving (IFDC).
Several methods for raising the funds have been mentioned: a new public offering, private equity and the establishment of an infrastructure investment trust or InvIT.
The InvIT route has become attractive since the Indian government announced in June that the dividends would be tax free. It is possible that Mytrah becomes the first company to establish such a trust.
Mytrah have been installing and managing wind farms since 2011. As reported in June they currently have 826MW of installed wind capacity, but according to chairman Ravi Kailas are on track to reach 1GW before the 2017 wind season (May to August).
This year Mytrah won their first solar projects with a capacity of 500 MW in 4 states, but mainly in Telangana (a new state established in 2014 for the Telegu-speaking people around Hyderabad in southern India). Their price of Rs5.7 (6.5p) per kWh is surprisingly high, given that prices below Rs5 have been quoted for some recent projects, for example Fortum’s in Rajastan.
The state of Telangana in India (from Di Karte: NordNordWest, Lizenz)
In other news the Indian government announced in June the first competitive tender for wind installations. It will be for 1 GW and is designed to boost wind energy generation outside the 8 westerly states where most current installations are located.
In an interview with Bloomberg, Bob Smith, head of international business and investor relations for Mytrah, mentioned other ways of growing wind and solar capacity. For example, “Repowering” would replace existing wind installations with newer more powerful models, thereby making better use of precious land.
Adding solar installations to wind sites (so-called hybrid sites) would also improve land efficiency, but there are problems of tariff and, above all, of storage, since transmission lines may not handle the peak power being produced and large scale cost-effective energy storage is not yet available.
Finally, he expects the current market focus on utility-scale projects will soon return less profits: the focus will then be on corporate customers.
The planned growth will hopefully return Mytrah to profit. In the meantime the share price lies at 49p, compared to a 52 week low of 42p and high of 81p.