Reorganisation of business structure

In order to tap business opportunities and strengthen our foothold in the Indian power sector, we reorganised our business operations in 2018. Now, the shareholding of Sembcorp Gayatri Power Limited (SGPL) has been transferred to SEIL and Sembcorp Utilities (SCU) stake in Sembcorp Green Infra (SGI) has been transferred into SEIL.

The merger of thermal and renewable energy business into SEIL is expected to drive synergies and prepare a streamlined corporate structure, creating enhanced value for our stakeholders. It has enabled us to run low-cost power generation business in India leading to improvement in our profitability and business sustainability.

business-img-1


business-img-2

Executing projects ahead of time

In October 2018, SEIL’s 100% subsidiary SGIL, completed its 250 MW SECI-1 wind power project in Tamil Nadu. The project was the first one to be completed fully amongst the wind power projects that were auctioned in different rounds of Central wind projects auctions, conducted by Solar Energy Corporation of India (SECI) under the aegis of Union Ministry of New and Renewable Energy. It was awarded by SECI on behalf of India’s Ministry of New and Renewable Energy (MNRE) in April 2017.

The project is aligned to India’s commitment to installing more power generation capacity based on clean sources.

In the SECI-1 project, SEIL through its subsidiary has entered into long-term agreement with Power Trading Corporation of India to generate and supply renewable power to the states of Jharkhand, Bihar, Uttar Pradesh and Delhi. The project consisted of 119 units of Suzlon’s 2.1 MW S111-120m Wind Turbine Generators (WTGs). It is estimated that the project will light up more than 216,000 homes and reduce CO2 emissions by over 700,000 tonnes per annum.

SEIL’s achievements


FIRST

Among all SECI auctioned wind projects to achieve full completion

~216,000

Households equivalent of electricity generating from SECI-1 project

700,000 tonnes/annum

Reduction in CO2 emission

Expanding footprint to international frontiers

SEIL won an international competitive tender conducted by the Bangladesh Power Development Board (BPDB) to supply 250 MW power to Bangladesh. The SEIL’s P-2 won both the short term and long term bids from BPDB for a total period of 15 years. This bid fits into our strategy of providing cost-competitive and reliable power supply, while prudently contracting our balance open capacity at viable tariffs.

SEIL has commenced supply of 250 MW to Bangladesh from its super critical power plant (SEIL P-2) in Nellore from February 2019.


250 MW

Awarded Power supply contract in Bangladesh by BPDB

15 years

Tenure of the contract period for BPDB project

Ensuring financial closure

Financial Closure for balance SECI projects were achieved during the year, in spite of the challenging market conditions.

Our Company’s subsidiary has successfully raised Commercial Papers at attractive rates. The team managed to raise H1,000 Cr listed bonds at an attractive interest, fixed in nature, for tenure of 5 years.

The team has continued to shift from higher-cost debt to low-cost debt. The debt portfolio is being progressed from a floating rate interest regime to a fixed rate interest regime. As a result the Company’s subsidiary has managed to secure a 5-year fixed interest term loan for a H100 Cr of term debt.

As on date, credit ratings for more than 90% of the operational projects achieved high ratings.

We, endeavour to minimise our interest cost burden by proactively managing our debt funding. To reduce the cost of borrowing’s, we have mapped out strategies like adapting to low-cost debt funds, evaluating repayment options for ECB expsoures and switching over to floating interest rates from fixed interest rate debt portfolio. These initiatives have helped minimise the cost of borrowings and enhance the profitability.

business-img-3

Improving prospects for India’s thermal power market


During the year under review, we secured the debt refinancing for both our thermal power projects at SPSR Nellore District in Andhra Pradesh. The re-financing for both P1 and P2 were completed through a combination of ECBs, long-term rupee debt and Masala Bonds infused by the parent company in Singapore, reflecting the group’s confidence in the country’s thermal power market. The strategy was on account of improvement in bottom-line by reducing interest cost and ease the burden on cash flow by extending the loan repayment tenure to 20 years.


Refinancing for both plants completed at a competitive rate despite the stress in the Indian power sector, especially in thermal power. India being the key market for us, we are committed towards its long-term growth and our refinancing strategy reflects our commitment to achieve the same. The net result achieved was interest cost savings and improvement in credit ratings of SEIL.

Self Operations & Maintenance (O&M) of renewable assets

In order to improve efficiency and maximise production at lowest lifecycle cost, we undertook a project to review the renewable business segment.

To improve generation, the company has focused on further strengthening its capabilities and improveing its efficiency. By introducing self-O&M in its renewable business, the company is focusing on minimising the production costs per unit of energy generated over the life of the asset (LCOE) by ensuring asset productivity, reliability and accessibility.

Besides strengthening our capabilities, this initiative has helped in improving the turbine performance, increasing safety standards and helping in improving generation by implementing ancillary technologies. Moving to self-O&M in its renewable business is helping SEIL to move its performance indicator from traditional timebased availability to a more scientific energy based availability.

This project will enable us to further strengthen our capabilities within the organisation and improve efficiency level and increase power generation.

36.69%

EBIDTA margin in FY 2018-19

business-img-4

Setting up of Virtual Brain Renewables

SEIL has introduced an advanced digital tool, Virtual Brain Renewables (VBR) in its renewable operations. The analytics-based digital asset management platform – VBR, helps in monitoring more than 30 wind energy sites and provides real time data and indicators on wind – speed, temperature, power output, plant load factors etc., as well as wind versus power generation efficiency curves availability.

The state-of-the-art digital platform provides information that helps in performance monitoring, forecasting, real-time condition monitoring and anomaly detection that will help the operations team with insights for predictive maintenance. With VBR digital tool integrated in our core operating processes, right down to the sites, engineering and supply chain, we have been able to deliver high levels of Energy Based Availability.

>30 assets

Managed through VBR

business-img-5

Deployed low carbon e-fleets fleet

SEIL has introduced electric vehicles (EVs) at its supercritical power generation plant in Nellore. In continuation with its commitment to operate its facilities in an environmentally friendly and sustainable manner, this fleet has been introduced for commuting in and around the plant.

The e-vehicle fleet, also known as the green fleet comprises of a mix of e-cars, e-scooters and e-buggies. Charging facilities have also been installed within the SEIL complex to fuel the green fleet. The green fleet is being used for commuting employees for their day-to-day plant operations, making transportation clean and more energy efficient.

business-img-6