**Summary: NHPC Plans ₹2,000 Crore Securitization for Expansion in Hydropower**
NHPC Ltd, India’s largest hydropower company, is exploring the option of raising approximately ₹2,000 crore through asset securitization in the upcoming financial year to fund its expansion in hydropower and renewable energy projects. The company has already exceeded its monetization target for FY25.
### NHPC’s Securitization Strategy
– **Who**: NHPC Ltd, a state-run hydropower major.
– **What**: Plans to raise ₹2,000 crore through asset securitization.
– **When**: For the upcoming financial year (FY26).
– **Where**: India, focusing on hydropower and renewable energy projects.
– **Why**: To support expansion efforts after surpassing the FY25 target.
### Current Status of Asset Finalization
– NHPC has not yet finalized the specific assets for securitization, and discussions are ongoing.
– The company achieved a monetization target of ₹2,000 crore in FY25 by securitizing the free cash flow from the Dulhasti Power Station in Jammu & Kashmir, generating total proceeds of ₹2,348.45 crore.
– In FY24, NHPC also monetized the return on equity from the Kishanganga Power Station for eight years.
### Understanding Securitization
– Securitization involves converting illiquid assets or their expected future cash flows into investable securities, allowing investors to receive interest and principal payments.
– The power sector represents 7% of the assets available under the Union government’s national monetization pipeline, which includes:
– 6 GW of hydropower and renewable energy assets valued at ₹39,832 crore.
– Power transmission assets worth ₹45,200 crore.
### Future Plans and Government Initiatives
– NHPC, designated as a ‘Navratna’ company, aims to fund its expansion in hydropower, pumped storage, and solar projects.
– Once the assets for securitization are finalized, NHPC will invite bids from banks and non-banking financial companies, selecting the institution offering the most favorable terms.
### Conclusion
As NHPC prepares for its next phase of growth, how will the securitization of assets impact its future projects in the renewable energy sector?
**FAQ: What is NHPC’s target for asset securitization in FY26?**
NHPC aims to raise approximately ₹2,000 crore through asset securitization in the upcoming financial year to support its expansion efforts.
