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SJVN Ltd
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Ladies and gentlemen, good day, and welcome to the Q3 FY '22 Earnings Conference Call of SJVN Limited, hosted by Elara Securities Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rupesh Sankhe from Elara Securities Private Limited. Thank you, and over to you, sir.
Yes. Good afternoon, everyone. On behalf of Elara Securities, we welcome you all for the Q3 FY '22 conference call of SJVN. I take this opportunity to welcome the management of SJVN represented by Mr. N. L. Sharma, Chairman and Managing Director; and Mr. A. K. Singh, Director Finance. We will begin the call with a brief overview by the management followed by a Q&A session. I will now hand over the call to Mr. N. L. Sharma for his opening remarks. Over to you, sir.
Thank you. Good afternoon to everybody. I am here to present the Q3 results of FY '22 of SJVN Limited. Let me share with all the analysts and the investors present over here that the shared vision, the goal or the target of the company we have revised. Earlier, it was 5,000 megawatt company by '23, '24 and 12,000 megawatt company by 2030 and 25,000 megawatts by 2040. Now the management after considering the achievement, results and the projects in the pipeline aligned with the futuristic strategy of the government of India in the renewal sector also and the demand of energy in the years to come, management after giving a deep thought and the Board of the company has also agreed to revise the shared vision of the company. For the short term, by '23, '24, the goal remains the same, that is 5,000 megawatt company. But we have doubled it, more than double it for 2030. Now we have revised the shared vision target from 12,000 megawatts to 25,000 megawatts by 2030. And from 25,000 megawatt by 2040 to 50,000 megawatt company. So now the shared vision of the company will be 5,000 megawatts by '23-'24, 25,000 megawatt by 2030 and 50,000 megawatt by 2040. So almost we have doubled the targets for the company. This has been done on the basis of the achievements and the pipeline of projects with SJVN.The news which I wanted to share with the shareholders that recently, Government of India allocated the power potential project in Arunachal Pradesh to different CPSC on the 1 basin and 1 developer basis and the government of Arunachal Pradesh has also been taken onboard. And for SJVN, 5 projects of 598 megawatts projects have been identified in [ Dihang ]. So these are the 5 projects, one of these 5 projects is the Italian this mega, ultra power hydropower project of 3,097 megawatts. So 5 projects of 5,098 megawatt capacity in Arunachal Pradesh SJVN is targeting for in the next 8 to 10 years. Similarly, a few days back, Government of Rajasthan conducted Invest Rajasthan Summit. And I was there in that summit, the honorable Chief Minister along with these 3 ministers were present. And SJVN submitted its intention to develop 10,000 megawatts solar power projects in Rajasthan in the coming 5 years. There is a huge potential of solar power project energy in Rajasthan. So SJVN is targeting developing 10,000 megawatt project in Rajasthan. So now our portfolio of all the projects, hydro, thermal, wind and solar has increased, and it has crossed 25,000 megawatts if we take into account the indicated capacity of solar projects in Rajasthan and 5 projects -- hydro projects in Arunachal Pradesh. So that encouraged us to revise our shared vision also. Regarding the quarter 3 results, let me share with all the analysts present here, the generation of power from all our operational projects in the quarter 3 has registered an increase of about 15%. It has -- in the quarter 3, the generation from all operational projects has been 1,480 million units against 1,280 million units in the last year. So there is an increase of about 200 million units of energy. During this quarter, this is about 15.6%. And similarly, the revenue from operations has also registered an increase of about 11%. Revenue from operation in Q3 this year is INR 550.92 crores against INR 495 crores last year, the increase of about INR 56 crores. Similarly, total income has registered an increase of 14%. It is INR 607 crore against INR 531 crores last year. Profit before tax has registered a very big increase. It has increased from INR 32.69 crores last year to INR 302.33 crores this year. And the profit after tax has registered an increase of 19%. This year, in the quarter 3, profit after tax is INR 232 crores against INR 195 crores last year. And so the net worth k of the company has also registered an increase of 8%. This has increased to INR 13,581 crores from INR 12,575 crores last year. The generation I have already shared in this quarter, there is an increase on all the fronts, whether it is hydro or the solar or wind. There is an increase in all the segments. Similarly, plant availability factor is again at its highest level. It is about 109.95% in case of Nathpa Jhakri and 109.71% in case of Rampur project. Similarly, the incentives, in terms of past incentives and UI charges, the total incentive, there is an increase of about 9%. In this quarter, the total incentives are about INR 74.4 crores against INR 68.11 crore last year. Similarly, there is almost total liquidation of LPS, late payment surcharges. We have recovered most of the late payment surcharges. The outstanding of late payment surcharges last year was INR 660 crores. Now this has reduced to INR 12.95 crore this year. So we have recovered almost the entire late payment surcharges this year. However, there are dues, outstanding dues of the main supply of energy from the different beneficiaries, but the major defaulter is J&K. And another development in the last -- since the last quarter, that we are on the verge of starting construction on the Sunni dam project, this is 382-megawatt project. We have already received the environment clearance for this project from Ministry of Environment and Forest and Climate Change. And also the forest clearance stage 1, FC Stage 1 also. And the -- for investment approval, the PIV has already recommended the investment approval of INR 2,614 crores and the matter will go to the union cabinet, the CPA. And we are expecting that in the coming months, it will be through in that cabinet also. And we are ready with the tendering process and the bulk will be awarded as and when we receive the investment approval from the Government of India. So similarly, we work on 2 solar projects, one in Uttar Pradesh, one in Gujarat is already going on. On the other hand, under CPSC scheme, the investment approval for more than INR 5,400 crores for 1,000-megawatt solar projects under CPSC scheme is already with the Government of India, and we are hopeful that in the coming couple of months, we will receive investment approval for this project also -- the CPSC projects or solar projects of 1,000-megawatt capacity. So this is all from the management side brief. Now we are ready to have queries or questions from your side. We will try to reply as per our best ability. Thank you very much.
[Operator Instructions] The first question is from the line of Rohit Natarajan from Antique Stockbroking.
Sir, on this revised target of doubling of these numbers by [ FY '42 ], what exactly is the funding plan that you have in mind?
Yes. Definitely that for the short term, medium term and long term. Short term, the target is the same revised 5,000 megawatts by '23, '24. As of now, our installed capacity is 2,016-megawatt and projects of about 3,500 megawatts are under construction. So we are sure that we will complete and commission these projects by that time. And for the midterm period 2030, Government of India has already fixed the target or the honorable Prime Minister has announced in the [ COG ] meeting that about 500-gigawatt capacity of nonfossil fuel will be installed in the country by 2030. And the total capacity installed -- capacity by in that year by 2030 will be around 830 gigawatt. So we are encouraged by our speed of taking projects -- having projects in pipeline. And we have aligned our strategy with the -- that of the Government of India. We are aggressively going in the -- this solar sector also. But at the same time, we are also playing on our strength of -- core strength of hydro also. So by 2030, our target has been revised from 12,000 megawatts to 25,000 megawatt. And out of this 25,000 megawatts, 15 to 18 gigawatts will come from solar. And rest of the 8 to 10 gigawatts from the hydro, thermal or wind also. So that is our target. And by 2040, the target from 25 gigawatt has been revised to 50 gigawatt. And we will not only restrict ourselves to this hydro, thermal, solar or wind also. We will also try to go energy from hydrogen and the new technology also and from battery storage also, we are keeping all these all options open.
Sir, I appreciate all those plans. But if I have to do some number crunching, between FY '25 and FY '30, say, let's assume you are planning to add 20 gigawatts. On an average, let's assume INR 40 billion is the per gigawatt calculation. INR 800 billion is the total capital outlay till FY '30, and out of INR 800 billion, 30% assuming that is your equity requirement, INR 24,000 crores will be the equity requirement from your side. And if you have to aggressively build it over 5 years, you essentially need INR 48 billion every year or INR 4,800 crores every year, which is almost like 3 to 4x -- 3x kind of a net profit that you are doing? So help me reconcile how this very aggressive jump can be funded? What is that equity funding going to be?
Yes, definitely. The requirement of equity and the funds for this ambitious expansion plan. The equity portion will be the cash flow from the project of about 3,500-megawatts capacity projects will come into operation in next 2 to 3 years, 2 to 3 -- 2 years. So cash flow from these projects will be there. Similarly, we are also exploring the options of funds from the different sources, as you know, that we have already gone into the bond market, we have raised INR 11,000 crore bonds also, we have also gone for external commercial borrowings what, $500 million [ ECV ] also in energy. Similarly, we will also so far securitization of existing assets. The agencies different agencies are coming forward, and we are in touch with them. The existing assets of Nathpa Jhakri and some other projects also, we have that in mind also. So that will -- loan will be -- that will be the securitization of assets. So what INR 7,000 crores to INR 8,000 crores that we will be eyeing for that also. So there will be no problem of cash flow, cash flow for the requirement of the cash equity portion as well as the debt portion for these projects.
Sir. Yes, sure. I appreciate that part. Sir, let me now come to the under construction project. We have close to 900-megawatt of Arun Phase III, where the progress on transmission front, it seems has not picked up in Q3. I see the land acquisition is done for 147 out of 580 towers is complete. But when it comes to the construction for towers of transmission now, it's almost like same, 94 out of 580 locations identified. It was same as 2Q. So was there any problem in 3Q?
So in Arun-III on the transmission front, it is agreed that initially, there was a problem of availability of the land for the construction or erection of the towers. But recently, this has -- we have taken steps with the government of -- taken up the issue with the Government of Nepal also. And the Government of Nepal has come forward and they have directed the CDOs and the field officers in the front, and we are now getting sight for the erection of the towers so you will see the progress in the next quarter that the erection -- the availability of the land and the erection of the towers will be faster in the coming quarters.
Sur sir, what was the -- we had a CapEx target of INR 1,200 crores this year for this thing, Arun Phase-III. And we have incurred close to INR 7 billion. That was the last amount in Q2. What is the revised amount like?
The CapEx target for Arun III this year was INR 1,200 crores, both for this construction as well as generation as well as the transportation component. And the next year target is around INR 2,100 crores on both these components. And so far, this year, we have spent around -- the total we spend to INR 2,205 crores. And this year what it is, I think what INR 1,000 crores, INR 1,000, we have already spent.
Sure, sir. And finally, on this Buxar thermal project sir, the main plant excavation we haven't made any progress from 2Q. Is there a slowdown in work in 3Q? What exactly is the situation?
No, no, there is no slowdown. I think the information is not correct with you. There is a very big increase in the quarter 3, we have spent around, I think, more than INR 1,300 crore CapEx on this project. And on the boiler -- for boiler burn this [ girder ] has also been lifted, and there is a substantial progress. If you want to have the detail of the progress we can supply it also or you are also welcome to visit the projects. There is a substantial good progress, substantially good progress on the Buxar thermal project in the Q3.
[Operator Instructions] The next question is from the line of [ Vipul Shah from Sumangal Investment ].
Sir, you said your -- by 2024, you will be reaching 5,000 megawatts. So out of this 5,000 megawatts, how many will be hydro, how many will be thermal and how many will be solar? And at that time, what will be your debt?
Out of 5,000-megawatt, around 1,900-megawatt as of now, 60 megawatts we'll be adding hydro this year. Then 900-megawatt we will be adding next year or is around -- so more than 2,872, around 2,900-megawatt hydro and thermal will be 1,320 megawatt thermal and about 800 to 900-megawatt of solar.
And what will be your debt when all these 5,000 megawatt capacity comes onstream?
The debt by '23, '24, by the time the project debt will be around INR 10,000 crores.
INR 10,000 crores. Okay. So how are we going to service those debts suppose if there is any unexpected development in any of the big projects, don't you think we are taking some undue risk, sir?
No. The debt is already tied up with the different banking institutions. And we have also kept these line of credit -- second line of credit also. So there will be no risk on the front of raising the debt also. And for major requirement of the debt, we are -- as I have already narrated or told that we have already managed about $500 million [ ECV ] and INR 1,000 crores bonds also. And we are also going for -- the banking institutions are ready to lend funds to us.
No my question is not about the availability of debt. My question is suppose if any of the big project runs into any unexpected problem, how will you service those debt? Because our balance sheet size is small.
Mostly, we have taken all the risk mitigation by years also. Moratorium period that is also there, and we have the cash flow line from our other projects which are debt-free now like the biggest project Nathpa Jhakri project is debt free now. And similarly, from Rampur project, most of the debt has already been paid also. So that we have back up also.
Okay. And lastly, sir, in FY '22, '23, till means March '23, how much will be the capacity addition?
By the end of FY '23, the addition will be around 204 megawatts, 205 megawatts, this 60-megawatt Naitwar Mori project hydro and 145-megawatt solar projects in Uttar Pradesh and Gujarat.
The next question is from the line of [ Santosh Kumar Khemka ], an individual investor.
I'm [ Santosh Kumar Khemka ], a shareholder. I along with my son [ Vineet Khemka ] is holding 6 lakh shares of SJVN.
Welcome.
I have 2 questions. First question is regarding the interim dividend for the current year has been drastically reduced from INR 1.8 paid last year to INR 1.15. While the 9 monthly EPS remains same, what is the reason for this drastic reduction in the interim dividend, please?
Regarding the interim dividend, you know that our -- about 10 projects are under construction and many more projects are under different stages of development. So to invest in these projects, we need more funds also. So the dividend has been marginally reduced, but it is even more than the minimum level set by the Government of India that we are giving more than 5% of our net worth. And this comes to the interim dividend of INR 1.15, which the Board has recommended. And finally, while giving the final dividend in the Annual General Meeting that the final dividend also but last year, it was INR 2.20, this year, the interim dividend is INR 1.15 and final dividend will be determined later on. So -- but to have more funds to -- for construction projects and make the company grow in the future.
Another question I have that I understand SJVN has presently project portfolio of around 16,000 megawatt. Besides you're also going for hydroelectric projects of 5,097 in Arunachal Pradesh and 10,000 megawatts solar projects in Rajasthan, both entail private cost of around INR 1.1 lakh crore. I wish to know the source of funding of these projects. Besides, will there be an increase in equity capital by way of rights or bonus issue going forward, please?
For arranging for the expansion plan, which we have already spelled out, we have already worked on the cash flows, inflow and outflow. And the requirement -- additional equity requirement from the shareholders will not be required. We will raise funds from the internal accruals. The cash flow will start from the projects which will come into operation in a year or 2 years. And still, at the same time, we are also arranging the funds from other sources as well. Just I have mentioned that by securitization of existing assets like Nathpa Jhakri project. We are hopeful of getting around INR 7,500 crores INR 8,000 crores. So these funds, we can also utilize as the equity to invest in the new projects.
The next question is from the line of Dhruv from HDFC Asset Management.
Sir, 2 quick questions. Firstly is on the CPSC bid. Sir, how much of the 1 gigawatt is now tied up in PPA?
Out of 1,000-megawatt capacity, the 150-megawatt this PPA has been -- 1,150 megawatts by [ HP ] state electricity board and 150 gigawatts -- 150 megawatts from New Delhi municipal corporation. So 300-megawatt capacity has already been tied up, and we are in discussion with the other government entities like in railways, rail or some other oil companies or the government DISCOM, Delhi metro, DISCOMs in Rajasthan and other Bihar also. So we are in discussion. We are hopeful that the PPAs will not be an issue for the CPSC scheme.
Got it. And sir, is there any outer limit before which you have to sign these PPAs?
It is still 2 years, it is 2 years.
2 years, I thought, sir, is for the commissioning or it is for the PPA? I mean, after PPA...
No. Before commissioning, we have to arrange the PPA.
Okay. Okay. Got it. So you can still go ahead with the project and I mean, keep seeking the PPA that way?
Yes.
Okay. Got it. Sir, and in your view, I mean, will you get the PPAs upfront or you will start constructing the project and you're hopeful that the PPAs will eventually get signed?
See, we will start the construction of the project, and we will keep on pursuing for the PPA. This will go simultaneously.
Okay. Okay. And sir, you mentioned that we are looking for PPAs with government entities like metros and oil companies and others. But sir, these are not DISCOMs discounts. So you will probably have to get open access approvals and other issues, which we generally hear about in DISCOM, I mean direct consumer purchases. So will that be an issue when you do such deals or will there be some government assistance in helping us manage this?
Here, [ ITC ] is interstate transmission charges are free or nil so we are in discussion with the various DISCOMs also. For the scheme, there is a condition that the CPSC scheme we have to supply power to the government entities only. So that is a condition.
Okay. Got it. Got it. But local DISCOM, I mean, open access charges and all those issues will not be a problem because these are government...
It's not a problem.
Okay. Got it. And sir, 1 last thing was on the Rajasthan, you signed this MOU of 10 gigawatt, congrats for that. So this contract with this MOU -- does the government also assure in some sense, assure you land and other facilities or that still has to be arranged by you?
They have assured in principle. If we go in the mode of JV, we will go execute this project maybe in the JV mode, with one of the entities of the government of Rajasthan. That is Rajasthan Renew Energy Limited. So they have assured in the principle that they will arrange government land for that. But at the same time, we will keep the auctions open for the private land if available. While discussing these issues with the Government of Rajasthan with the Chief Minister also, we have already requested that government help is required in the acquisition or the procuring of the private land also. They have assured that they will extend every possible help.
Got it. Got it. So with the MOU, you get probably first preference in terms of getting land. Is that a way to understand this?
Yes, you are right that we'll get that first preference is getting the land.
The next question is from the line of [ Siddhartha from Goodwill ].
Firstly I wanted to understand is our company like exempt from the 75% promoter holding norm or what's the reason behind government owning such a high stake where actually the promoter is allowed only 75% in most companies? So I wanted a comment on that.
Yes, sir. Right now, the government holding -- public shareholding in the company is around 13%, so we are still short of 12% as per the minimum public shareholding norms set by the SEBI. And the government -- let me share with you that the government has already initiated action on it, they are going to offload what 12% of the share.
By when will this be happening? Is there a time line or a date?
That will be decided. They have already finalized the -- they already appointed the...
Legal adviser to the issue and merchant bankers.
They already appointed the legal advisers and merchant bankers for this. So probably in the next 3 months, this may happen.
Okay. It will happen in the next 3 months, okay. Secondly, I wanted to understand, can we expect a change in the dividend policy because we are taking a lot of leverage. And considering our business is very capital intensive, just because the government has set certain norms for PSUs to give out dividends, I don't -- we might end up over leveraging or something. And we're not even raising equity. So will we consider a change because otherwise, it won't be very healthy to keep paying out 50% dividend every year while doing so much CapEx?
Yes, you are right. There's high dividend and at the same time, high CapEx, both cannot go together. So the dividend policy, of course, is under the domain of the Government of India, the norm will be around 5% of the net worth of 30% of the PAT, whichever is higher. So we are following that. But right now, we are managing this 5% of the net worth, and at the same time, we are in the CapEx this year. We are doing more than INR 5,000 crores, the target was INR 5,000 crores, so we will achieve that target of INR 5,000 crores, we will achieve that also. And next year, FY '23, you'll be doing CapEx of INR 8,000 crores. But you are right that the change in dividend policy. So Government of India will surely because there is...
Yes, can you expect an exemption or something because that would be great from a retail investors or any institution investors?
Yes, government can consider exemption also.
No, no. From the management, can we expect a request for the government or something it will be too bureaucratic otherwise?
Not right now, we are very comfortable in meeting the CapEx target and giving this minimum dividend also.
Okay. And my another question was that you mentioned thermal also, we are entering into terminal also, but I consider -- I was assuming that we are focused more on renewable and all. And because of that, our ESG and all might get affected. So what's the thesis behind going into thermal energy when there's other PSUs already doing that?
Yes. Thermal, we are doing only 1 project. And that too at cost plus basically Government of Bihar has selected us for executing that project in Buxar. So -- but we are giving now more emphasis on renewals, that is solar or wind also but at the same time, we are also ready to our core set of hydro, we are not leaving that. So the emphasis will be on hydro and renewal solar.
There was more of an ESG perspective question because we are a higher-rated ESG companies, so it would have been better if we stuck to renewables. But all right, that was good enough. I think we do just expect comment soon on the dividend policy because I think we might end up over-leveraging. That's our only concern.
That is a good suggestion from your side.
The next question is from the line of [ Aniruddha Arondekar ], an individual investor.
You mentioned the funding for our upcoming projects is mostly through securitization and debt. So is there any maximum debt-to-equity ratio we are looking at? Or we are going to fund as the opportunity come?
You can very well understand that right now, we are under leveraged. Our debt is what 0.19 to 1 but in the times to come, we can take it up to say 2 to 1. So there is a lot of hope of leveraging. So given the project pipeline with us, more debt will be required. And we will leverage the company in terms of debt equity ratio.
Okay. Just another question is for last 3 to 4 years, our generation capacities almost fixed around 2 gigawatts. So is there a significant addition in generation capacity in next 6 months or 1 year?
Because the construction work on the project started say around 2 to 3 years back. So given the gestation period for the hydro project is long, though, we are now also entering into solar also, the solar project it takes around 2 years for commissioning a project. So this year, FY '23, there will be addition of around 200-megawatt capacity or 205 to be more specific, 60-megawatt hydro Naitwar Mori in Uttarakhand and 145 megawatts of 2 solar projects, 1 in Uttar Pradesh and 1 in Gujarat. And in the FY '24, there will be addition of, I think, more than 2,500 megawatt capacity like thermal, hydro and renewable solar projects.
[Operator Instructions] The next question is from the line of [ Sanjay Jain ], an individual investor.
Yes. sir, I mean you have actually very large CapEx program for the next 10 years that either willfully or it's been pushed by the government on SJVN. And I mean, this number is like huge, like you were talking about 50 gigawatts of solar, which might be at INR 5 crores, something like INR 75,000 crores and hydro, you talk about 7 gigawatt project. I mean, it takes at least INR 10 crores to set up 1 megawatt hydro project with INR 70,000 crores. So it's INR 1,040,000 crores, INR 1,050,000 crores kind of CapEx, we are talking about over the next 10 years. It's a massive thing we are talking. And there is a question asked earlier and you tried to reply there. My thing is that I mean is this really going over the top. Is it that -- I mean, are we looking at our balance sheet, it's really -- we see a lot of innovative financing to execute these kind of projects. So I'm really not sure you have that kind of equity, which will be able to generate to fund these CapEx or you're thinking that this is just a vivid statement and these hydro projects may in Arunachal Pradesh just not come, there's a lot of hardening years, it might be 20, 25 years that these projects get over. Because I remember some of these projects are allotted to private players like Jindal and all about 10, 15 years ago, and nothing has happened in those projects. So what would be like a practical project execution or the CapEx requirement should we build in? Or are you also thinking of the solar projects, which are coming in, which gets executed in a shorter period of time when you spin them off into some Invits kind of structure so that your funds get released that then you can redeploy those funds into the next solar projects. Has some serious thought has been given on these kind of funding? Because these are not -- you can't really -- these are not simple things, and you really need to put a serious thought about funding these projects unless like these are like typical PSU visions, which you commit and you don't execute, and practically, like you'll do fraction of what you take because these projects are just kind of put in the drawing broad and start constructing in the ground.
Thank you, Sanjay, for your observations and queries. Let me categorically state that whatever we are getting and we are thinking and what we are envisioning, it is very, very serious and practical. Nothing of this kind that what we say, we plan and we do. Our CapEx line, if you go through our CapEx line, they last for 4, 5 years, year that we were spending having a CapEx of what INR 400 crores, INR 500 crores. Just in 5 years, we have crossed 10x INR 5,000 crores. Next year, we are doing INR 8,000 crores. And in the coming 8, 9 years, my CapEx line is of around INR 1,50,000 crore CapEx and that is -- that has been worked around seriously on the basis of our reason, our goal of 25 gigawatt company by 2030. And taking into consideration all the projects in pipeline, whether under construction or under various stages of government or the projects which we are aspiring or we are making efforts to get these projects. For example, you have rightly said for 5,000 megawatt capacity projects we have gone to Arunachal Pradesh. And I was advocating this sure of 1 was on due approach for the last 4, 5 years. Now all the government -- the Government of India, Government of Arunachal Pradesh, Government of Himachal Pradesh, or even the Government of Nepal, they have understood this theory of one basin one developer and the optimization of resources and faster government of this energy sources will take place. So for these projects, they were with the Reliance or JSW and you know that the private players, they cannot bid for a long for the results or the PSU central places, particularly have the capacity of bidding for this period and investing further. So similarly for this solar energy projects also, whether in Rajasthan, we are also having discussions with the Government of Uttar Pradesh, government of Bihar, Government of Punjab, so we will be executing duping these solar projects in these states. So wherever the opportunity falls in Gujarat also. So we are very serious, and we are getting the results also. So we will plan this equity portion, whether we do it in 70-30 or 80-20 ratio also. So far this projects, out of INR 1,50,000 crore CapEx, recurring around INR 30,000 crores to INR 40,000 crores or INR 50,000 crore CapEx this equity also. So we have all cash inflows, we have already worked out and we will not spin off the project, commission project. But there are other alternate sources of funding, innovative sources of funding, like securitization, I've already mentioned in my initial remarks or the reply to the questions that securitization of the existing report is we will get more than INR 10,000 crores for the 2 projects or the projects which will come into operation in the coming years. And through other sources also like raising our bonds or register commercial borrowing or other any innovative cost of funding, which will come in our way. And we will go step by step. We will go step by step. So that is the thinking and the plan on our side.
Sir, just 1 follow-up. My worry basically is that with this kind of CapEx, we have seen history in power sector that companies which were like very good balance sheet just like SJVN we're starting from a debt-free company, taking us down the line, we don't fall in a debt trap because do we -- do we have any target debt to EBITDA number because we will not let this debt number cross beyond the EBITDA that company is generating -- because if you go -- see project financing, you can some EBITDA in the projects. And hydro projects, they really take a very, very long period to come and by the time those projects from the project cost escalate so much, that the rates are not willing to pay that kind of tariff. We've seen that happening with [ NHBC ], some of those projects despite government giving some kind of liability funding, special dispensation, special interest rate for a certain portion of debt, you can take the example of [ Subhas Deep ] [indiscernible] projects that got stuck. And these projects are very likely to get stuck because they have a lot of environmental impact in that region. So what kind of risk mitigation are we trying to do so that we don't fall in debt trap?
Right. Sanjay, in business [indiscernible] or in the business terminology, debt free company may not be a good company. That means the money of the shareholders, we will not be utilizing it properly. But it is a prudent kind of debt that is there and there is a lesser risk. But in business, to earn more profit, we have to have some risk also in business. So risk cannot be ruled out. But at the same time, we will be going with the full wisdom and full prudence whether in the hydro sector or the solar sector, in the hydro sector, Government of India has initiated or has given guidelines also not for avoiding this time over and a cost overrun of the projects also. And from our experience, we have learned a lot. So we are a 33-year-old company in the power business. And we have learned a lot how to mitigate the risk and how to complete the projects, given the geological risk also and there are other surprises also, this is a minimum possible time. And you will see in the times to come that in a hydro sector also, we will not only be completing the project on the scheduled time, but we are planning to even commission the project before time by taking the innovative steps or out-of-box thinking ideas also. So we'll be doing that. We are sure that we will not enter into any kind of business where we will encounter the business trap kind of -- debt kind of thing. So we'll be doing that with all prudence.
Ladies and gentlemen, due to time constraints, this will be the last question, which is from the line of Rohit Natarajan from Antique Stockbroking.
Sir, basically, my question is on the Rajasthan. Can you throw some estimated EBITDA per megawatt, what will be that number looking like in your internal calculation for this solar project?
Can you repeat the question? There was some bouncing of the audio.
Sir, your Rajasthan, this 10 gigawatt that you have planned, you have the fresh -- in media article says you are planning to invest close to INR 50,000 crores in that particular project. What is the EBITDA per megawatt of solar project?
The estimated cost of these projects, 10 gigawatt capacity will be around INR 40,000 crores to INR 50,000 crores, that will depend upon the area. But in Rajasthan that installation is good. The sunshine days in a year are more than 300 -- or there is around 325 sunshine days in Rajasthan. The capacity utilization sector will be good. The investment may be around INR 4 crores to INR 5 crores per megawatt, but the generation of energy will be more. So the income from -- the generation of energy will be...
Sir, I appreciate that part. If you could help me understand what is the EBITDA per megawatt you are looking in those projects?
That we have not yet worked out, but we will work out the figures later -- at this time, it cannot be worked out.
Okay. Sir, in the existing portfolio, what is that number looking like? Existing portfolio of solar.
Existing portfolio solar right now, our -- this 145-megawatt capacity projects, 2 projects are under construction. And we have a portfolio of 2,600 megawatts and with this addition of 10,000 megawatts, which we can see in the pipeline also. But at the same time, we are bidding other solar projects also, we are having discussions with the government of Uttar Pradesh, Punjab, Bihar for more capacity to the project also. So total capacity by 2030 will be around 15 to 17 gigawatt capacity of solar.
Ladies and gentlemen, as this was the last question for today, I would now like to hand the conference over to Mr. Rupesh Sankhe for closing comments.
Yes. So we thank management of SJVN for giving us an opportunity to host this call. We also thank all the investors and the analysts for joining this call. Have a good day, and thank you.
Thank you very much.
Thank you. On behalf of Elara Securities Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.