Indowind Energy To Invest INR1 Billion In Fiscal 2009-2010 To Generate Wind Energy

Indowind Energy Limited (Indowind Energy), an India-based company engaged in wind power generation, is planning to invest INR1 billion for generating 30 MW of wind energy in the fiscal year 2009-2010, The Hindu Business Line reported. In the previous fiscal year 2008/09, the company has added 20.25 MW to its current capacity of 7.59 MW with an investment of INR1.6 billion.

In addition, the company is in discussions for additional land with the Karnataka government to increase its production capacity from 15.92 MW.

Bala Kutti, chairman, Indowind Energy, said, “One of the major constraints in any wind energy project is availability of land. We will overcome it as we own about 250 acres in Tamil Nadu.”

For the expansion plans, the company has proposed to increase its authorized capital from INR650 million to INR2 billion with the conversion of foreign currency convertible bonds (FCCB), qualified institutional placement, preferential allotment to promoters and employees stock option.

The investors of $30 million FCCB will have to convert 50% of their holding into equity according to the agreement. The company will also help investors by reducing the conversion price in line with the current market price, said Kutti.

“Once the proposal is through, the company’s net worth will become INR2.5 bilion and we can rise up to INR7.5 bilion from banks to fund our expansion plans,” he added.

The company has entered into a memorandum of understanding with the Gujarat government for a 100 MW wind farm project, which requires an investment of INR6.5 bilion. The Gujarat project is in a very nascent stage as the government is yet to consider our demand for 3,000 acres, said Kutty. One MW of wind energy requires around 20 acres of land.

According to the industry estimates, 1 MW of wind energy will cost INR65 million investment, while it is INR200 million for a 1 MW of solar energy. The conventional thermal power requires an investment of INR50 million per MW, but it takes about four to five years for project implementation and is prone to fluctuation in raw material, he said.

The industry expects from the union budget, that the government will implement the prior proposal of generation-based incentive of INR1 per unit. “The government has proposed the incentive last year, but had to put it off due to the general election,” said Kutty.