Tangedco to raise Rs 7,600 cr via bonds; may import coal for summer demand

Tamil Nadu's state power utility has decided to import 4.8 lakh tonnes of coal as demand surges

The Tamil Nadu Generation and Distribution Corporation (Tangedco) will raise around Rs 7,600 crore through bonds in the financial year 2022-23 for swapping high-cost loans, said a source.

This comes at a time when Tamil Nadu registered a record demand of 17,106 MW (megawatt) last week. The state power utility decided to import 4.8 lakh tonnes of coal to handle the surge in power demand in summer. A tender in this regard is expected to be opened on April 11. The state had imported 20 lakh tonne of coal from private players the last time in 2019 from Indonesia for Rs 1,650 crore.

“We have a guarantee from the government to raise around Rs 7,600 crore. To that extent, we will be raising funds through bonds for swapping high-cost loans. We have initiated the process,” said the source on condition of anonymity. As on March 2021, Tangedco’s outstanding debt was around Rs.1,34,119.94 crore: including Tamil Nadu government loan of Rs 4,582.45 crore and UDAY loan of Rs 4,563 crore. In 10 years, its interest cost also saw an over two-fold jump to Rs 11,225 crore in 2020-21.

However, the company managed well in terms of bringing down its dues to the power sector generating companies. “Our overall dues will be in the range of Rs 11,000 crore, all put together like solar, wind and conventional. Major share to Nuclear Power Corporation and NTECL,” said the source. Based on government data, the average cost of supply in Tamil Nadu comes to around Rs 9.06 a unit, as compared to an average rate of realisation of Rs 6.70 a unit, putting the utility into trouble.

As per data provided by power sector generating companies on a porta, an amount of Rs 103,027 crore was due from discoms early March. Out of this, around 21 per cent or Rs 21,407 crore was the due from Tamil Nadu. Tangedco’s daily intake of coal is reportedly around 72,000 tonnes for five coal-based thermal power plants. The company is also reportedly planning to use JSW’s coal terminals in Odisha’s Paradip and Tamil Nadu Ennore ports to handle the additional loads of coal.

Tangedco is planning to set up a 20,000 megawatt (MW of solar power project with battery storage, 3,000 MW of pumped storage hydroelectric project, and 2,000 MW of gas-based power units in the next ten years. These projects may require a loan to the tune of Rs 1,32,500 crore. To provide technical expertise in developing renewable energy projects and for fundraising, Tangedco has signed a memorandum of understanding with the Indian Renewable Energy Development Agency (IREDA), the largest lender in the RE sector.

The state is also in talks with companies based out of Denmark to develop a $5 billion energy island in the Gulf of Mannar.