JSW Energy Limited

Integrated Annual Report 2020

OUR BUSINESS MODEL

JSW Energy Limited is the energy vertical of the US$12 billion JSW Group. The Company along with its subsidiaries operates in the entire value chain of power business such as generation, transmission, mining and power trading. We believe in staying at the forefront of new market trends and satisfying customer needs by supplying reliable, affordable and quality power.

Our business model is focused on owning and operating a diversified portfolio of assets in thermal, hydro and renewable segments. We ensure maximum efficiency in our operations by adopting best global industry practices and also strive to reduce the environmental impact of our operations. Our future strategy is to grow in the renewable energy segment and ensure sustainable value creation for all our stakeholders.

We have one of the strongest balance sheet in the Indian Power sector and generate healthy free cash flows, providing us with ample headroom for pursuing our renewable energy growth plans. We have been gradually building organisational capabilities in the renewable space and have already initiated the process of acquiring topographically productive land banks for commissioning new renewable capacities. We are also evaluating various inorganic growth opportunities, which can lead to significant value creation for our stakeholders in the long-term.

Transitioning towards a Green Future

Our strategy of growing in the renewable energy space is well aligned to the rapidly evolving sector dynamics and overall macro environment. With strong Government impetus towards green energy, large inflow of investments from a wide array of global investors and improving project economics led by technological innovation, we believe that renewable energy will be at the centerpiece of India’s long-term power story. Henceforth, power capacity addition in India is expected to be primarily driven by the renewable energy segment. Therefore, we see immense potential for business growth and stakeholder value creation in the renewable space.

Further, we believe in sustainable value creation and remain fully committed to the environment and society and strive to reduce our carbon footprint

At JSW Energy, supported by an existing portfolio of efficient thermal and hydro assets, we intend to capitalise on a new golden-era of renewable power generation, and play an influential role towards a carbon-free future. We look ahead to become a 10 GW company over the medium term with incremental capacity predominantly coming from renewable sources.

We see immense potential for business growth and stakeholder value creation in the renewable space.

Business Positioning

At JSW Energy, we embark on new business opportunities striking a balance between growth aspirations and prudent risk management. This has been the key factor that has helped us to become the leading power producer in India. We have one of the strongest balance sheets in the Indian Power sector, well positioned to pursue attractive growth opportunities.

We design our growth strategy as follows:
  • We ensure prudent capital allocation decisions with stringent due diligence practices. We further stress test the business case at various levels to ensure the economic viability of the proposed projects.
  • We endeavour to invest in power assets, which have the capability to generate low cost power that helps to reduce offtake and receivable risks. We also prefer to enter into long-term PPAs, which render visibility to stable long-term cash flows.
  • We blend our superior project execution skills and operational expertise to generate healthy free cash flows.
  • We utilise the free cash flows to further invest in growth capex and de-leverage our balance sheet, thereby generating enough headroom to pursue value -accretive growth.
Our process for creating value