NLC to invest Rs 1,290 bn to ramp up mining, power generation capacity

NLC India Limited plans to invest Rs 1,290 billion to add new production capacity in mining and power generation by 2025. The company, which traditionally focused on lignite and coal-based power, also plans to set up renewable energy projects which can generate power up to 4251 Mw.

The total power-producing capacity of NLC, earlier known as Neyveli Lignite Corporation, is expected to go up from 4,731 MW as on June 30, 2018, to 21,011 MW with an addition of 16,280 MW by 2025, from various sources of power generation, according to the company. The plan also includes the investments it would make through subsidiaries and joint ventures.

By 2025, the company plans to double the lignite-based power from the current 3,240 MW capacity with the addition of another 3,540 MW, while the coal-based power generation would be increased multifold, from the 1,000 MW as on the end of June, this year, with another 5,980 MW. 

The renewable sector would see a major investment, as the capacity is expected to go up from 491 MW as on June, with an addition of 3,760 MW by 2025. The company would also look at acquiring power assets to add capacities to the tune of around 3,000 MW during the period.

In terms of the medium-term plan, NLC plans to ramp up the capacity by 6,660 MW, mainly through the acquisition of power assets to the tune of around 3,000 MW and increasing the renewable business to 2,760 MW. However, lignite-based power production will add a meagre 900 MW and no new capacity will be added in the coal-based power facilities during the period.

At present, the company is working on four lignite projects to add 8.55 MW. With an investment of around Rs 17.45 billion, all of these projects are expected to be completed on or before September 2019. Two upcoming projects in lignite - Palayamkottai and Vellar and the third mine in Neyveli - would add 11.5 MT capacity each, with an investment of around Rs 108.72 billion in March 2022 and March 2021 respectively. 

In terms of coal projects, two coal blocks - Talabira II and III and South Pachwara, are expected to come up with 20 and 11 MW capacity with an investment of Rs 24.01 billion and 17.95 billion, respectively.

The ongoing and upcoming projects in the lignite power production are expected to be around 3,540 MW with an investment of around Rs 283.72 billion. In the coal-based thermal power stations, it is expected to add around 5,980 MW with a total investment of around Rs 521.72 billion. In Tamil Nadu, 3560 MW of renewable energy, including solar systems of around 909 MW, are to be added. 

The company would spend Rs 160.95 billion for the completion of the projects, the last one scheduled to be executed in September 2020.

The company has been rated as the highest by various credit rating agencies. Its outstanding loans has grown to Rs 87.20 billion during the year 2017-18 compared to Rs 69.59 billion during the previous year. It has employed Rs 151.98 billion capital during 2017-18, as against Rs 125.01 billion during the previous financial year.

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