See biz opportunity of Rs 7 lk cr in solar power: PTC India

A: As you indicated our organisation PTC India Financial Services (PFS) is for last 1.5 year or so put its focus on renewable. We believe that renewable in India has a great potential. Just to put things in perspective, I believe in India which probably is one of the very few countries which is sunshine for almost 330 days in a year has a potential of making almost 1,50,000 megawatt through solar energy in maybe a period 10 years.

Similarly as far as wind is concerned I believe that we can have as much as 1,00,000 megawatt. Today wind energy India produces only about 25000 megawatt and as far as solar is concerned it is less than 3000 megawatt. So, we can go 50 times.

To put it in the financial terms if 1,50,000 megawatt of solar, the project cost have gone down is now about Rs 8 crore. So, this is a business of Rs 10 lakh crore and if we take a debt equity ratio of 70:30, 7 lakh crore of potential business is available only in solar. As I was saying that we have focused in this area and in order to broaden and ensure that we are able to quickly appraise and finance these projects, we have decided to have memorandum of understanding (MoU) with similar organisation.

PFC which is the largest power financing in this country has setup a special subsidiary only for renewal energy. So, couple of days back we have entered into an MoU and soon we will be also entering similar MoUs with other organisations. The system will be that we will appraise the projects and similarly if they get some proposal they will appraise the project and we will meet periodically and we will jointly finance.

Ekta: How much of your loan book is towards renewable energy already and how much of these projects have seen 90 percent of completion or entire completion?

A: As we are speaking today our 35 percent of loan outstanding is for renewable. I believe that gradually it may become 50 percent in maybe next 12-15 months. The beauty of renewable especially solar and wind is, it has a very low gestations period. Solar can be setup anything between 9-12 months and similarly wind also can be put in less then one year.

The main issue is only the acquisition of land and that is the only thing which takes time. However, having acquired the land these things can be put modularly. Solar, suppose there is a project of 50 megawatt, you don’t have to complete the entire 50 megawatt to start supplying power. You can do 5 megawatt and if your acquisition is in place you can start dong it.

So, the beauty of such projects is as against the conventional thermal which takes anything between three to five years, here the project completion can be anything between 9-12 months and they start making money and then they start repaying to us.

Ekta: Can you give us a sense in terms of how Q2 is panning out; Q1 was very strong for you’ll, you had an net interest income (NII) growth of over 80 percent, your profit growth was over 100 percent and your net non-performing assets (NPAs) continued to be nil. Can you tell us whether that could be a repeat performance for you’ll in Q2?

A: What I can share with you is that we have a very strong risk assessment process and that is why we have nil NPA. Even today we have nil NPA status. We believe that having given total veto power to our risk department, going forward we will continue to have a healthy book position. Out of six or seven proposals which come for our consideration, only one passes the muster. I believe we will continue to grow and as a result we see good position in future as well.