Mahindra Susten draws up plan to step up its green energy play, plans to invest ₹21,000 cr in next 5 years

Mumbai: Mahindra Susten, the renewable energy arm of the Mahindra Group, plans to invest ₹21,000 crore over the next five years to develop a renewable energy asset portfolio of nearly 5.5 GW. The company, with its 39% partner Ontario Teachers' Pension Plan, has committed equity to build peak capacity of that order in the next four to five years.

"We have made a business plan of this capacity and got it approved with the shareholders," MD Deepak Thakur told ET. "We are also looking at the entire green energy canvas in terms of building our portfolio of renewable energy assets which will include storage projects and round-the-clock power projects."

This January, Mahindra Group and Ontario Teachers co-sponsored an infrastructure investment trust (InvIT) holding assets in the renewable energy space.


Sustainable Energy Infra Trust (SEIT) has raised primary capital of ₹1,365 crore as part of the initial offer of units and will help facilitate the growth capital of about ₹21,000 crore.


The company has created a simple, seamless and effective cycle to fund its growth, he said.

"We will never need the ₹21,000 crore at once. As the assets get built, the company will flip them and get the money back to create new assets," said Thakur.

The company won't need to take on a heavy debt burden for a long time because of the asset flip, which will happen every three years, allowing the debt to move to the InvIT, he said.

Last month, the company entered the hybrid renewable energy segment with a plan to set up a ₹1,200 crore, 150 MW solar wind energy project in Maharashtra. The project includes the installation of 101 MW wind and 52 MW solar capacity. The facility is expected to generate 460 million kilowatt hours (kWh) of clean energy, offsetting 420,000 tonnes of carbon dioxide emissions.

"We started out as an EPC (engineering, procurement, construction) company, building solar projects for other developers," Thakur said.

"However, about six years back, a decision was taken at the group level that we would start building our projects and that's when we started to participate in tenders and build about 1,540 megawatts peak (MWp) of projects."

Mahindra Susten was formed in the year 2010 but the company did not make much progress in the segment until two years ago when it decided to focus on being a renewable energy developer and stop taking third-party EPC business.