Aim-quoted power generator OPG Power Ventures today announced a £45m investment in four solar projects.
The company, which specialises in developing and operating power plants in India, said that it had won a competitive bidding process for the projects, to be built on sites across the Karnataka region. It expected them to be delivering positive cash flows as early as June 2017.
“We believe [this] could be a significant contributor to the growth in OPG's future earnings. In fact, I believe adding low risk solar generation capacity that is sold forward into the long term is significantly beneficial to the quality and robustness of our asset base and earnings,” said CEO Arvind Gupta.
As part of the investment, OPG signed an off-take agreement with the Karnataka Power Corporation. This locks in revenues for 25 years at a level that would negate the need for state subsidies.
OPG confirmed that the investment would not affect its decision in May this year to pay a maiden dividend. That announcement was made amid increased speculation that it was eyeing up a move to full listing on the London Stock Exchange.
The company is targeting a pay-out of 15-20 per cent of net earnings and added that “the solar energy business is expected to make a significant contribution towards this target”.
In June 2015 OPG outlined a plan to increase its focus on renewable energy having previously concentrated operations on coal-fired power stations.