India-focused power generator OPG Power Ventures PLC (LON:OPG) has widened its growth strategy - with a £45mln investment into 62 MW of solar projects.
The board approved the investment in four new solar projects across various locations in Karnataka - one of the most industrialised states in India - and all four are expected to be generating cash flow by June next year.
OPG participated in a competitive bidding process and the company has signed long term (25 year) power purchase agreements (PPAs) at an average tariff of Rs 5 with Karnataka Power Corporation.
The deal will be funded by internal cash and debt and the targeted return levels are expected to be met without any subsidies being available.
The group is increasingly focusing on renewable energy, in particular in solar energy.
"With solar panel costs falling, their performance improving and an improving project financing environment, we have continued to prioritise projects that can be funded through a combination of debt and internal resources and that can be expected to generate visible long term revenues which meet our targeted return levels without any subsidies being made available," it said.
The Indian government wants to achieve 100 GW of solar capacity by 2022 with the individual states setting out capacity targets and long term PPA's.
"We will continue to evaluate projects consistent with our stated strategy of adding accretive growth projects that replicate the national energy mix, enable debt to be paid down and dividends to be paid," said OPG.
The firm runs various power plants in India and in 2016, total energy generation increased by 70% to 3,177 gigawatt hours (GWh) from 1,861 GWh in 2015, as the Gujarat plant commenced supplies from its first unit in April 2015 and from its second unit at the end of January 2016
Shares were unchanged at 60.25p each.