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JSW Energy Ltd.

BSE: 533148 Sector: Infrastructure
NSE: JSWENERGY ISIN Code: INE121E01018
BSE 00:00 | 14 Oct 395.35 -4.00
(-1.00%)
OPEN

400.00

HIGH

408.70

LOW

390.10

NSE 00:00 | 14 Oct 394.00 -4.80
(-1.20%)
OPEN

398.85

HIGH

408.00

LOW

390.50

OPEN 400.00
PREVIOUS CLOSE 399.35
VOLUME 90333
52-Week high 408.70
52-Week low 56.00
P/E 263.57
Mkt Cap.(Rs cr) 64,970
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 400.00
CLOSE 399.35
VOLUME 90333
52-Week high 408.70
52-Week low 56.00
P/E 263.57
Mkt Cap.(Rs cr) 64,970
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

JSW Energy Ltd. (JSWENERGY) - Chairman Speech

Company chairman speech

Dear Shareholders

2020 and 2021 have been amongst the most challenging years in decades. Theunprecedented health crisis caused by the novel coronavirus took an immense human aswell as economic toll globally. At JSW we responded immediately with a comprehensivecovid-19 response plan - putting in place health and safety measures to protect ouremployees; running our plant operations smoothly to ensure supply to our customers; andproviding essential support and assistance to our local communities in need. Yet even insuch critical circumstances our company reported a solid set of financial results andfortified our growth plans with new projects and foray into renewable energy. This hasclearly demonstrated the strength and resilience of our business model. Today we have asignificantly de-risked operating portfolio and a robust balance sheet - one of thestrongest in the sector - enabling us to pursue growth meaningfully.

The pandemic has accentuated the need to build sustainable businesses for navigatingsuch headwinds in the future albeit those that could emerge as a result of climate changein the coming years. Climate change and Sustainability is at the core of JSW Energy'sgrowth agenda. We have focused our growth strategies towards transforming our generationportfolio to ~70% renewable driven by FY25. By embracing new-age green energy as ourfoundation for dynamic growth we are transforming ourselves to ensure that we become a'net-zeroRs.contributor of greenhouse gas (GHG) emissions by 2050 or even earlier.

We aim to grow our portfolio to a capacity of 10 GW by FY25 and 20 GW by FY30 solelythrough the renewable energy segment. In line with this we have announced 2.5 GW ofgrowth projects that are currently under-construction. We have also taken various actionsto strengthen our ESG agenda including the adoption of comprehensive sustainabilitypolicies clearly laid out targets and developing a 2030 sustainability roadmap.

Resilient Business Consistent Performance

In FY2021 even amidst a relatively weaker macro-economic scenario peak power demandhit an all-time high of 190 GW. The overall power demand in the country though weaker infirst half of the fiscal saw a sharp recovery in the second half and witnessed only a1.2% decline YoY. Out of the 12 GW total capacity i added in the country in FY2021 8 GW jwas contributed by renewable energy sector including hydro energy.

Despite the pandemic induced challenges JSW Energy delivered a healthy performancedriven by focused execution and financial prudence. In-line with our strategic intent tode-risk the business our long term PPA tie-up has now increased to 86% up from 81% atthe end of FY2020. Overall net generation from long term portfolio increased by 3% YoYduring the year supported by a healthy offtake from our customers. Our O&M cost per MWcontinued to j further decline YoY in FY21 and is a benchmark in the industry acrossvarious segments of thermal lignite and hydro. We optimized our operational efficacy byaccelerating digitalization of operations increasing agility in working remotely andadopting best industry practices via TQM processes. Both increasing long term tie-ups aswell as optimizing O&M costs has helped us to improve the quality of our earningsresulting in a steady EBITDA generation over the past few years

thus insulating us from the volatile sector dynamics.

Our financial risk profile continues to remain strong aided by significant deleveragingand efficient working capital management. Over the last 3-4 years we have optimized ourcapital structure through proactive repayments prepayments and refinancing. Thiseffectively helped us to improve our bottom line through a meaningful reduction in financecost. Our leverage profile now enables us to execute our growth plans while maintainingprudent debt metrics. On the receivables front when a large section of the powergenerating stations in the country are facing elongated receivable days due to the weakfinancial profile of the Discoms our stringent working capital practices helped us inreducing the receivables which stood at a three- year low at the end of fiscal 2021.

We achieved two key feats in our hydro portfolio. First our persistent effortsmaterialized as the Central Electricity Authority (CEA) approved uprating of our KarchamWangtoo plant by 91 MW to 1091 MW in a phased manner. Second we issued our debut greenbond of USD 707 million to refinance the term loan of the operating assets tapping theoffshore bond market amid a tough pandemic scenario.

The overwhelming response to this maiden issue has been very humbling and has enabledus to diversify our funding sources and develop strong relationships with globalinvestors which bodes well for our funding needs for the renewable energy growthaspirations going ahead.

Renewable Powered Growth

Rapid growth in urbanisation universal electrification and a renewable energytransition driven by climate change implies that India's incremental power needs will belargely met by renewable energy. Our business strategy is perfectly aligned with thisoffering us a material

Our target is to grow our portfolio to 10 GW by FY25 and 20 GW by FY30 from the current4.6 GW. This will entail a total capex outlay of Rs.75000 crore over the next decade.opportunity to unlock value for all our stakeholders in the years to come.

We have a clear strategic priority:

To grow our generation portfolio by investing in renewable energy: wind solar andhydro. Our target is to grow ; our portfolio to 10 GW by FY25 and 20 ; GW by FY30 from thecurrent 4.6 GW. This will entail a total capex outlay of Rs.75000 crore over the nextdecade.

In the beginning of fiscal 2021 we secured the largest wind bid of 810 ; MW with SECIunder the tranche IX blended auction. In the next tranche X wind auction of SECI wesecured another 450 MW. Recently we received approval from the Board for tying up 958 MWof a consolidated portfolio of solar and wind projects under the group captive model withJSW Steel on an arms-length basis. Further in our hydro portfolio we startedfull-fledged construction of our 240 MW Kutehr hydro-electric project. In total wecurrently have ~2.5 GW of renewable energy projects under-construction with a totalenvisaged outlay of ~Rs.15800 Crore.

Availability of strong internal accruals healthy cash balances and a large balancesheet headroom allow us to fund these projects comfortably. We are targeting more qualityprojects in the upcoming competitive bidding auctions. We will continue to apply ourrobust risk-return approach to select projects that are returns accretive and delivervalue to all stakeholders.

Towards Carbon Neutrality by 2050

In the last year the need for climate action and sustainability intensified globallyand our focus on ESG deepened further. Underscoring the ambitions of the Paris Agreementwe released our sustainability policies aligned to the UN's 17 Sustainable DevelopmentGoals. We created a comprehensive Sustainability Roadmap encompassing Climate ChangeWater Security Waste Management Air Emissions & Biodiversity targets for 2030 alongwith a pledge to achieve Carbon Neutrality by the year 2050.

In FY21 we achieved a 11% YoY reduction in our specific greenhouse gas emissionsmaking solid progress on our goals. In addition we continued to achieve 100% utilisationof fly ash and zero liquid discharge across our plant locations. We further committed to'Business Ambition for 1.5C' to set science-based emission targets stepping up ourambition to tackling climate change. During the year we also constituted a SustainabilityCommittee to review the progress of initiatives under the purview of businessresponsibility and to periodically assess the ESG performance. We also expect to seesubstantial reskilling taking shape within the workforce over the next few yearsstrengthening our internal capabilities in the new areas of expansion.

I am very pleased to share that our initiatives on climate and sustainability are beingrecognized externally as well. We are amongst the highest rated power companies in Indiawith a thermal portfolio by a slew of global ESG rating agencies.

Going forward we aim to be a sustainable growth engine - contributing positively tothe economy environment and society at large. We intend to play this role by meeting thecountry's growing future demand for energy; in meeting the Government's target for adding450GW of renewable generation by 2030; and in enabling India to outperform its Parispledges.

Looking Forward

While challenges to the economy will continue in FY2022 various targeted interventionsby the Government and the Reserve Bank of India should help ensure conducive financialand socio-economic conditions. On the health front stronger public health systems andmass covid vaccination should help contain and combat the spread of covid-19 graduallylimiting the loss of valuable human life.

JSW Energy stands on strong foundations allowing us both to manage the ongoingcovid-19 situation and to pursue growth sustainably.

I view with pride the optimism and commitment displayed by our employees in the face ofsuch exceptional challenging environment. I take this opportunity to extend my thanks toall of them for their diligence guaranteeing the stability of our operations anddelivering key business milestones during a tough year.

Finally I would like to thank all our external stakeholders including the Central andState Governments customers investors regulators lenders rating agencies suppliersand advisors for their unwavering support throughout the year.

Best wishes

Sajjan Jindal

Chairman and Managing Director

.