Rs 7000,00,00,000 Project Investment: Union Cabinet Approves Investment Exemption for this Power Generation Company to Accelerate Renewable Energy Growth

The Union Cabinet has granted a significant investment exemption to NLC India Limited (NLCIL), a Navratna Central Public Sector Enterprise (CPSE), to accelerate its renewable energy growth. This special approval, chaired by the Prime Minister, allows NLCIL to invest Rs 7,000 crore into its wholly-owned subsidiary, NLC India Renewables Limited (NIRL). This investment by NLCIL into NIRL and subsequent investments by NIRL into various projects directly or through joint ventures will not require prior approval under the existing delegation of powers. Furthermore, this investment is exempted from the 30% net worth ceiling set by the Department of Public Enterprises for CPSE investments in JVs and subsidiaries, providing NLCIL and NIRL enhanced operational and financial flexibility.

These exemptions are designed to support NLCIL's ambitious renewable energy targets: developing 10.11 GW of capacity by 2030 and expanding it to 32 GW by 2047. This strategic move aligns with India's commitments made at COP26 to transition towards a low-carbon economy and achieve sustainable development, including the pledge to build 500 GW of non-fossil fuel energy capacity by 2030 and reach Net Zero emissions by 2070. As a prominent power utility and Navratna CPSE, NLCIL is crucial to this national energy transition. The investment will enable NLCIL to significantly expand its renewable energy portfolio, thereby contributing substantially to both national and global climate action objectives.

Currently, NLCIL manages seven operational or near-commercial renewable energy assets with a combined installed capacity of 2 GW, which will be transferred to NIRL following this Cabinet approval. NIRL is poised to become the primary platform for NLCIL's green energy initiatives, actively seeking new opportunities and participating in competitive bidding for renewable energy projects. This approval is anticipated to strengthen India's standing as a green energy leader by reducing reliance on fossil fuels, decreasing coal imports and improving the reliability of 24x7 power supply nationwide. Beyond its environmental benefits, this initiative is also expected to create substantial direct and indirect employment opportunities during both the construction and operation phases, fostering inclusive economic growth and benefiting local communities.

About NLC India Ltd

NLC India Ltd is a government-owned company in India primarily involved in lignite mining and thermal power generation. It operates mines in Tamil Nadu and Rajasthan, using lignite to produce electricity. This power is then sold to various states in India, including Tamil Nadu, Rajasthan, Andhra Pradesh, Kerala, Karnataka and Puducherry. As a Navratna company, NLC India holds a significant position in the Indian energy sector.

The company has a market cap of over Rs 33,000 crore and has been maintaining a healthy dividend payout of 24.4 per cent. The stock is up by 31 per cent from its 52-week low of Rs 185.85 per share and has given multibagger returns of 420 per cent in 5 years.

Disclaimer: The article is for informational purposes only and not investment advice.