Godawari Power & Ispat Ltd, an integrated steel manufacturer based in Chattisgarh, has announced plans to set up a solar power plant of 250 MW capacity in the state. The plant has been estimated to cost Rs 750 crores when completed, and will help meet the firm’s RPO obligations as well as overall lowering of emissions. the project will be funded by the firm out of its own internal accruals. Importantly, with a cyclical boom in the metals sector, firms need to consider capex carefully to plan for the long term, and the move by Godawari Power and Ispat should be seen in that context too.
Godawari Power ended the year 2020-21 with a turnover of Rs 3640 crores, and a profit after tax of Rs 625 crores. A jump of over 30 percent and 415 percent over its results for 2019-20.
Chattisgarh, a laggard on solar growth so far, will also probably welcome a large solar plant finally.
With a commissioning date of December 2022 and expected generation capacity of 370 million units of electricity per annum, the firm hopes to replace grid power by using its own plant. Effective cost of the solar power will also be much lower than existing grid charges the firm pays, offering a decent payback opportunity too.
Godawari Power & Ispat Limited’s steel plant has an existing captive power generation capacity of 73 MW, comprising of 42 MW captive energy from waste heat recovery, 11 MW from a coal-fired thermal power plant, and 20 MW from biomass power capacity. It also gets 25 MW from a coal-fired thermal power plant by its arm Jagdamba Power and 50 MW from a solar thermal power plant in Rajasthan to meet its requirements.