JSW Energy Ltd (NSE: JSWENERGY) Q4 2025 Earnings Call dated May. 15, 2025
Corporate Participants:
Sharad Mahendra — Joint Managing Director & Chief Executive Officer
Pritesh Vinay — Director, Finance and Chief Financial Officer
Analysts:
Rajesh Majumdar — Analyst
Mohit Kumar — Analyst
Atul Tiwari — Analyst
Sumit Kishore — Analyst
Bharanidhar Vijayakumar — Analyst
Abhishek Nigam — Analyst
Aniket Mittal — Analyst
Darsh Solanki — Analyst
Nikhil Abhyankar — Analyst
Dhruv Muchhal — Analyst
Dhruv Muchhal — Analyst
Amit Bhinde — Analyst
Mahesh Patil — Analyst
Anuj Upadhyay — Analyst
Rajesh Majumdar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the JSW Energy Limited 4Q FY ’25 Post Results Earnings Conference Call hosted by B&K Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Rajesh Majumdar from B&K Securities. Thank you. And over to you, sir.
Rajesh Majumdar — Analyst
Yeah. Hi. Good evening, everyone, and once again, welcome to all of you. We are proud to hold the conference call of JSW Energy Limited Q4 FY ’25 and full-year FY ’25 earnings today.
We have today the management team represented by Mr. Sharad Mahendra, Joint Managing Director and CEO; Mr. Pritesh Vinay, Director, Finance and CFO; and Mr. Bikash Chowdhury, Head, Investor Relations and Strategic Finance.
So without much ado, I shall now request Sharad sir to start with his opening comments. Thank you, sir.
Sharad Mahendra — Joint Managing Director & Chief Executive Officer
Thank you, Rajesh, and good evening, ladies and gentlemen, and thanks to you all for joining us today. It is my pleasure to share the highlights of our performance for the quarter and the year gone by.
FY ’25 has been a landmark year for JSW Energy, one marked by strong execution, strategic growth and sector-leading achievements. I’m proud to share that we recorded the highest annual wind capacity addition by any renewable energy company in India this year. During the year, we crossed a significant milestone of 10 gigawatts set under Strategy 2.0. And as I speak today, JSW Energy is a 12.2 gigawatt company, reflecting the momentum we have built across both organic and inorganic expansion.
In FY ’25 alone, we have added 3.6 gigawatt of capacity, strengthening the diversity and scale of our portfolio. This has resulted in company reporting the highest ever annual EBITDA of INR6,115 crores and reported a PAT of highest PAT of INR1,951 crores. Before we delve into our performance, I would like to share some sector highlights. The dynamics are shifting towards enhancing energy security, addressing the increasing baseload and peak load management.
FY ’25 has marked an emerging trend in India’s power sector dynamics, with several state distribution companies increasingly turning to competitive bidding for thermal power procurement. This trend reflects the growing urgency among states to secure firm power and complement the intermittent renewable generation. Thermal power, particularly from domestic coal-based sources is regaining strategic importance. Having said this, we are happy to tell that JSW Energy has also secured a 1,600-megawatt ultra-supercritical plant in West Bengal, which is fully tied up with WBSEDCL.
Coming to capacity additions, India’s total capacity — installed capacity has reached 475 gigawatts, and the country has added 33 gigawatts in fiscal ’25. Notably, renewable energy led the growth, accounting for a record 29 gigawatt of total additions. This surge was primarily driven by solar power, which contributed 24 gigawatts, followed by 4.2 gigawatts of wind capacity. The power demand for the country grew 4.2% in FY ’25. In the fourth quarter, we saw a demand growth of 3.2% year-on-year on a high base of 7.4% growth seen last year in the same quarter.
Structurally, we continue to expect a strong power demand in the medium term. The peak demand witnessed in quarter four is 238 gigawatts, which was in February ’25 and 250 gigawatts in FY ’25. The merchant market remained resilient during the year, averaging around INR4.5 per unit on exchange on the back of soft coal prices. We have seen merchant tariffs firming up in quarter four as compared to quarter three FY ’25.
In Q1 FY ’26, we are seeing merchant tariffs further increased to INR4.76 per unit. For the quarter gone by, the API 4 coal prices were stable year-on-year at $95 per tonne. And as we talk currently, API 4 coal prices are around $89 per tonne, while within the domestic coal market, sufficient steps are taken to keep a robust coal supply.
Coming to company performance. We have added total 3.6 gigawatts of operational capacity during the fiscal ’25. This comprises 1.7 gigawatts of organic capacity that affirms our capabilities to execute large-scale projects efficiently. Our organic wind capacity addition stands at 1.3 gigawatts during the year gone by, representing one-third of the nation’s total wind capacity addition during the year. These greenfield wind capacity additions include the completion of SECI-X wind project of 454 megawatts. Our remaining first batch of under construction wind projects are nearing completion. The quarter gone by also saw commissioning of the second unit of Ind-Barath JSW Utkal, which was 350 megawatts and which has now stabilized and running smoothly.
Complementing our organic growth, we have strategically expanded our footprint through consummation of two important transactions: one, KSK Mahanadi Power, a 3.6 gigawatt unit on 6 March, ’25 asset and O2 Power, a 4.7 gigawatt platform on 9th of April 2025. KSK Mahanadi is 3,600 megawatt plant and is the largest thermal asset acquired via NCLT proceedings for a total resolution amount of INR16,084 crores.
Currently, 1,800 megawatt is operational, which is 95% tied up under PPAs and has fuel supply agreements. In FY ’25, the plant reported full year EBITDA of INR2,895 crores on a PLF of 67.4%, while the underlying EBITDA stands at INR2,382 crores. We have improved PLF from 67.4%, which was witnessed during the year to 79% post completion of the transaction in just 25 days of operations, which we did in the month of March.
The deemed PLF stands at 99% during this period. We are currently integrating operations with JSW Energy and implementing the comprehensive plan to bring in cost efficiencies. In another large transaction, we acquired O2 Power, which is a 4.7 gigawatt RE platform for a total value of INR12,468 crores. The current installed capacity of O2 Power is 1.3 gigawatt and we expect it to scale to 4.7 gigawatt by June ’27 by undertaking capital expenditure of between INR13,000 crores to INR14,000 crores.
Turning to our under construction portfolio. JSW Energy is currently constructing 11.3 gigawatts of generation projects, all of which are fully tied up under long-term power purchase agreements. The under construction portfolio includes 9.7 gigawatts of renewable energy projects and 1.6 gigawatt of Salboni ultra-supercritical thermal power project, which marks our investment in greenfield thermal after more than a decade. Beyond this, we have a robust project pipeline of approximately 4.9 gigawatts of projects where letter of intent or letter of awards have been secured and PPAs are yet to be signed.
In this quarter, we have reduced our untied capacity as now our Vijayanagar thermal plant is fully tied up. This development not only ensures stable and predictable cash flows, but it also marks a fundamental shift in the composition of our open capacity. With Vijayanagar fully tied up, our open capacity now stands at approximately 976 megawatts out of the total portfolio. And out of this 976 megawatt, only about 9% to 10% of the capacity is dependent on the imported coal and rest all is on domestic coal. This transformation signifies a decisive move towards a more resilient domestic coal-based open capacity, reducing exposure to global coal price volatility. Therefore, the breakeven price for our open thermal capacity also reduces with the higher use of domestic coal.
Coming to energy storage. We recognize the critical role it plays in integrating renewable energy. We have expanded our logged-in energy storage capacity to 28.3 gigawatt hour. Notably, the Bavali in Maharashtra, the 12 gigawatt hour hydro pump storage project, which is tied up with MSEDCL is currently under implementation. In addition, recently in quarter one of FY ’26, we have signed PPA with UPPCL for another 12 gigawatt hour of PSP project to be delivered in next six years. Regarding our SECI 500-megawatt 1 gigawatt hour battery energy storage system, we have appealed in APTEL and awaiting the outcome.
Coming to the operational performance for the quarter, our net generation for the quarter rose by 24% year-on-year to 7.9 billion units, driven by a 32% increase year-on-year in renewable generation. On the back of new capacity additions, total net generation from the tied up portfolio was up by 28% year-on-year during this quarter, while short-term generation increased modestly.
Our thermal portfolio witnessed a healthy PLF of 77% in the quarter and 71% for the year. A significant portion of JSW Energy’s wind capacity was commissioned during the second half of the last fiscal. As is widely recognized, wind generation in India typically peaks during the first half, particularly from May to September, while the second half tends to experience lower wind speeds and lower generations. Therefore, we are well placed ahead of the coming wind season and anticipate a normalization of generation output.
Lastly, coming to the outlook. We are proud to announce that we have surpassed our 10 gigawatt capacity target set under Strategy 2.0, a major milestone in our growth journey. Building on this momentum, I’m happy to announce and launch our Strategy 3.0, our new roadmap to achieve 30 gigawatt of generation capacity and 40 gigawatt hour of energy storage by 2030. This strategic vision of 30 by 30 underscores our commitment to powering India’s energy security with scale, speed and sustainability.
By FY ’30, we expect our EBITDA on a run-rate basis to grow between 2.7 times to 3 times over FY ’25 pro forma EBITDA levels. To support this expansion, we plan to invest INR130,000 crores in capital expenditure between FY ’26 to FY ’30. With 11.3 gigawatt under construction projects and a robust pipeline, our locked-in capacity now stands at 30.2 gigawatts, placing us firmly on track to deliver target set under Strategy 3.0.
That’s all from my side. With this now, I pass on to Pritesh Vinay to talk on the financial performance for the quarter. Thank you.
Pritesh Vinay — Director, Finance and Chief Financial Officer
Thank you, Sharad. A very good evening to all the participants.
As Sharad mentioned, for the quarter, net generation was up by 24% Y-o-Y. And this translated to a total top line increase of 21% Y-o-Y to just shy of INR3,500 crores. We reported an EBITDA of INR1,513 crores, which was up by 17% Y-o-Y. And profit after tax for the quarter stood at INR408 crores, which was up by 16% Y-o-Y. For the year as a whole, we saw the EBITDA increase by 5% Y-o-Y to INR6,115 crores and profit after tax for the year was up by 13% Y-o-Y at about INR1,950 crores.
Moving to the balance sheet and leverage. If you look at the net debt for the quarter, at the end of the quarter, post completion of the KSK acquisition, the total net debt stood at about INR44,000 crores, out of which about INR9,500 crores was for projects, which are under capital work in progress and almost INR34,500 crores was the leverage sitting on the operating companies.
Against the reported EBITDA of INR6,115 crores, if you look at the pro forma EBITDA, which basically is if all these assets that we have acquired in the middle of the year were available with us for the entire part of the year, the pro forma EBITDA is about INR8,860 crores. And hence, the net debt to pro forma EBITDA stands at just about 5 times. The other key metric that I would like to highlight is that the net debt to equity stands at 1.6 times at the end of the financial year.
The weighted average cost of debt went up by almost 18 bps sequentially and stood at about 9.05%. And from a receivables point of view, the receivables continue to be healthy. We reported a total outstanding receivables of INR2,900 crores. From a headline point of view, in terms of DSO, it may appear to be at 76 days, a bit higher compared to March last year. But what I would like to point out are 2 things. A, given that the amount of power being sold on merchant is lower where you get immediate realization, there’s a higher proportion of power, which is being sold on a credit period. And secondly, the quality of receivables are very, very healthy. In terms of the overdues out of these total amount, the overdue trend as a percentage of total is significantly lower on a Y-o-Y basis.
Maybe I’ll just take a stop there, and we can open up the floor for Q&A.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] Our first question comes from the lion of Mohit Kumar from ICICI Securities. Please go ahead.
Mohit Kumar
Hi. Yeah, thanks for the opportunity and congratulations on building a very strong pipeline and especially completing two inorganic organic acquisition. My first question is, of course, you have built up a very large baseload portfolio now, especially with the acquisition of Mahanadi and now we’re building a new power plant in West Bengal. My question is, do you still see accretion to this baseload portfolio? And my related question is, what is the status of equipment placement and land acquisition for the West Bengal coal-based power plant?
Sharad Mahendra
Can you repeat the first question, please?
Rajesh Majumdar
First question, how do you think about accretion, further accretion to this baseload portfolio? Do you still think that you would like to do more of the coal-based power plant?
Sharad Mahendra
See, Mohit, yes, we are seeing the increase in the peak demand, which is — we witnessed 250 gigawatt, the baseload demand, especially with the significant increase in the intermittent renewable energy, which is solar, the peak load demand, the baseload demand will definitely keep on increasing gradually. One is the demand growth and the pattern in which the new capacities which are coming in. If we see last year, a significant portion has come from renewable and also primarily driven by solar. So the baseload demand will gradually — is forecasted to be increasing wherein the thermal is going to play a key role.
And regarding your second question in terms of the readiness, I’m happy to tell that the entire land on which the plant is to be set up is in our possession. So, that is not at all a challenge. Everything — the groundwork, in fact, the initial preparatory work has already started. Regarding the equipment placements, we are at an advanced stage of finalizing that. And that we don’t see as a constraint at all in completing the project within the PPA timelines.
Mohit Kumar
’25 for KSK Mahanadi. And what is the improvement possible over the next two years to three years?
Sharad Mahendra
See, as we told you that in my opening remarks, I told about the EBITDA, which was — operational EBITDA, which was in the range of INR2,350 crores operational EBITDA, which was there full year for KSK. And the way we have demonstrated in terms of increased PLF bringing in the efficiencies, we are quite confident that we are still working. We are integrating. It is only about a month which has happened. We are working on, areas have been identified, but we see a significant scope of improvement in terms of the efficiencies, which will ultimately improve in terms of the revenue as well as the bottom line.
Mohit Kumar
Would you like to quantify that number, sir?
Pritesh Vinay
No, Mohit, it may not be appropriate to quantify it at this point. But I think what will be better and more credible is to deliver some kind of a quarterly progress and that will be a better way of tracking this, yeah.
Mohit Kumar
Okay. Thank you. Thank you, Mr. Vinay.
Operator
Thank you. Our next question comes from the line of Atul Tiwari from JPMorgan. Please go ahead.
Atul Tiwari
Yes, sir. And congratulations on hitting your targets of capacity expansion. I have two questions. The first one is again on the Salboni project. Would it be possible to share some color on the PPA? Is it a regulated PPA? Or is it a completely bid PPA? And if it is the latter, then what are the kind of prices that we’re looking at?
Sharad Mahendra
See, this is — again, the Salboni is a Section 63 PPA, which was under the competitive bidding, which we have been able to secure.
Atul Tiwari
Okay. And so I’m assuming it will be under a two-part tariff, fixed charges and energy charges separately?
Sharad Mahendra
Yes, yes. Yes.
Pritesh Vinay
Okay. So Atul, the levelized 25-year tariff under two-part mechanism will be roughly INR5.45 per kWH.
Atul Tiwari
Okay. Assuming domestic coal supply, of course.
Sharad Mahendra
Yes, yes. It is fully tied up, yes.
Atul Tiwari
Okay. Okay. And your plan of doing INR1.3 trillion of capex by FY ’30, would you be able to share some color on the thought process around need for equity to meet that? And how much of that you can generate internally and how much you will need to raise from outside?
Pritesh Vinay
So Atul, as we have been talking about this consistently in the past that any growth aspiration has to be calibrated within a certain framework of protecting leverage profile and calibrating growth commensurately. So it may not be appropriate to quantify that because needless to say, and I’m sure you would be aware of this, that there will be a back ending of this. So as your capacity base goes up, your cash accretion goes up, your ability to spend goes up progressively. So it’s not 130 divided by 5 equally spent in every year, right?
So therefore, everything has been planned in such a way that the capital availability is matched with the expected capacity increase going forward. And if need be, as we had demonstrated about a year ago, if you look at that point of time, if you looked at our committed growth pipeline and our then prevailing leverage profile, we actually didn’t need to raise any equity capital. So therefore, these are things out there, and it’s very difficult to crystal ball and pinpoint exactly. But anyways, all the growth aspirations will be significantly calibrated to meet the guardrails, yeah.
Atul Tiwari
Okay. Okay. Great. Thank you. Thanks, sir.
Operator
Thank you. Our next question comes from the line of Sumit Kishore from Axis Capital. Please go ahead.
Sumit Kishore
Good evening. I have a couple of questions. The first one is if you could give us a sense of what was the total capex in the previous financial? What is that you expect to spend over FY’ 26 and FY ’27 separately if possible, in case just FY’26 would also be fine? That’s my first question.
Pritesh Vinay
So Sumit, what we actually ended up incurring as a total capex for fiscal ’25 was about INR8,000 crores. And if you remember, we had at the start of the year, we had guided for INR15,000 crores capex for the year. Because of certain delays in some of the ongoing projects and because we were accelerating the inorganic growth pipeline, we calibrated it down. For fiscal 2026, we are expecting to end up spending anything between INR15,000 crores to INR18,000 crores in that range to complete the ongoing projects plus the pipeline of new growth projects that have started.
Operator
Sorry to interrupt Mr. Sumit. You’re not audible. May I request you to use your handset, please? Your voice is breaking.
Sumit Kishore
Am I audible now?
Operator
Yes, sir. Please go ahead.
Sumit Kishore
Am I audible now?
Operator
Yes, sir. Please go ahead.
Sumit Kishore
Yeah. So in continuation, when you mentioned that the net debt to pro forma 5 times. So in terms of the — your comment regarding the pacing of growth, in all circumstances, you would keep below the 5.5 times net debt to pro forma EBITDA is the understanding we have.
Pritesh Vinay
That is the endeavor, Sumit.
Sumit Kishore
Okay. So there could be temporary overshoots that could happen without you needing to raise equity? Should we read it that way?
Pritesh Vinay
So it’s like this, Sumit, as has been our track record and as seasoned trackers of the sector like yourselves know, that project progress, particularly in the infrastructure space, including the power sector, there are too many non-controllable factors. And there could be times where there could be some bunching together of projects. But more importantly is this that wherever you are allocating capital, are they inherently at returns more than your cost of capital? And from a leverage profile point of view, rating agencies tend to have a slightly through-the-cycle view because they also factor in that the capital work in progress is that returns accretive or is that returns dilutive. So a lot of factors go into that. So may not be able to give a precise answer, but just wanted to give you a sense of how to think about it, yeah.
Sumit Kishore
Fair enough. Just the second question is on projects like Salboni, which are — so the renewable pipeline that you have, you could pretty much start executing or you would already have started executing the projects where PPAs are done. But for new project starts like Salboni or KSK expansion, I mean, how are you thinking in terms of the pace of deploying capital?
Sharad Mahendra
See, Sumit, if we talk of Salboni here also, the PPA has already been signed. There is a timeline in the PPA. So, we are going to — which normally is about 48 months to 60 months time period as per the PPA. So we will be spreading. And of course, as Pritesh earlier said, that initial one or two years, which is more of a groundwork, preparatory work is there, it is more back-ended. So it is being planned. It cannot be just equally distributed in years. It is more — it will be back-ended. So, that is what Salboni has been planned. Again, the PPA has been signed.
Regarding KSK, as we have informed earlier also that the three units which are already operating and the balance of plant, which is fully ready for full 3,600 megawatt, so — and one unit, which is the fourth unit to commission, 40% of that work also is complete. So that is, at a very low cost, that can be commissioned. And as the things progress beyond fourth unit, fifth and sixth unit also will be accordingly planned. In my opening remarks also, as I said, that many states are now coming forward to meet their base demand for thermal requirements are coming in. So, that gives a very unique opportunity for us to execute the project in a very short time as compared to the standard time, which a greenfield thermal power plant takes for KSK.
Sumit Kishore
So basically the low cost should be interpreted as was — would it be INR5 crores, INR6 crores per megawatt for bringing up that third unit?
Sharad Mahendra
Yeah. See, difficult to quantify exactly. But yes, as I told you that whatever the benchmark numbers maybe you are aware of setting up a greenfield project and assuming that fourth unit is 40% ready, balance of plant for entire INR3,600 crores is ready. So it can be estimated that it will be significantly lower than the normal benchmark cost for a greenfield thermal plant.
Sumit Kishore
That is very clear. Just the last point on other income for the quarter, it’s up 149% to some INR3.1 billion. So was that basically treasury income for the acquisitions that you were about to make?
Pritesh Vinay
Yes. There were two primary components to that, Sumit. There was a deferred consideration payable that was for one of the prior acquisitions of Mytrah, which was subject to certain conditions subsequent. And there was a write-back of that provision because that didn’t have to be paid out. And the second is a treasury income gain, as you rightly said, because of the high cash and liquidity that we carried on the books.
Sumit Kishore
How much was the write-back for Mytrah roughly?
Pritesh Vinay
I think that was roughly about — close to ballpark about INR100 crores.
Sumit Kishore
I have more questions, but I’ll get back in the queue. Thank you so much.
Operator
Thank you. The next question comes from the line of Bharanidhar from Avendus Spark. Please go ahead.
Bharanidhar Vijayakumar
Yeah. Good evening. Regarding this Salboni project, could you…
Operator
Sir, may I request you to use your handset, please? Sir, your audio is not loud enough, sir.
Bharanidhar Vijayakumar
Just a minute. Is it better now?
Operator
Yes, sir. Please go ahead.
Bharanidhar Vijayakumar
Yes. So, I just wanted to get a sense on the Salboni project as to its readiness with respect to environment clearance, forest clearance?
Sharad Mahendra
These all are under process. There is already at the similar location, this one cement plant is running. So, I think those all clearances are under process. So, we don’t see that as a challenge.
Bharanidhar Vijayakumar
Okay. Second question is on the construction portfolio of around 12 gigawatts. Of this, especially when it comes to renewables, what percentage has land, what percentage has CTU approved or awarded transmission capacity? Because you mentioned it has PPAs, but the other two things like land and transmission, you can mention.
Pritesh Vinay
So, we have also talked about this in the past, but just to refresh the memory that typically, what happens is the way we approach any project execution is you cannot wait for 100% of the land before doing the groundbreaking because you also have to meet the PPA timeline commitments. So typically, you either already have a control about a significant percentage of the land and you have a line of sight or a visibility of being able to get to the finish line on as-you-go basis, right? So that is one.
Second is on the connectivity side, for the projects that we need to deliver in the immediate term, we already have — either already have connectivity or we are in very advanced stages of securing connectivity. The other thing I would like to add is that when we were acquiring O2, we had also talked about the fact that O2 does not only have 100% of the connectivity that it needs for its own platform, but it also has some excess connectivity. So, we are planning projects in such a way that from a synergy point of view, some of that excess connectivity that O2 has, we will be utilizing for our own projects because now everything is JSW, right? So it’s a combination of these two things, which gives us a high degree of confidence in being able to commit to certain capacity targets in a certain timeline, yeah.
Sharad Mahendra
And also to add, which we have — to reiterate again, which we have said earlier also, for maybe next two years, whatever projects under construction to be executed, we all know that there is a challenge in terms of getting the CTU connectivity, which the — in general, the industry is facing. So we — as a strategy, the PPAs which were signed and within the same states, we have found the areas which are suitable, whether it is a wind or solar.
So, we have reduced our dependence for next two years on CTU connectivity. And within these state, the STU connectivity availability is something which, as Pritesh said, that majority of the projects we have the connectivity in place or at a very, very advanced stage. So, that strategy has really helped us in ensuring that we will be in a position to execute the projects within the PPA timelines.
Bharanidhar Vijayakumar
Okay. Sure. My final question is if you have any estimate of peak debt that would be in your balance sheet in between FY ’26 to ’30, what could be that number?
Pritesh Vinay
We unfortunately don’t think that is the right way to think about it because what is more significant for us is that whatever projects you are implementing at a certain tariff and at a certain capital cost or a project cost, are they returns accretive or not? If they are all meeting your hurdle rate of, say, a mid-teen equity IRR, then the debt is serviceable, right? So therefore, what is more important and appropriate in our view to track is the leverage ratio. And more importantly, to get into the mechanics of this is your debt service coverage ratio, right? So as long as one is comfortable on that side, one can take calls on an ongoing basis.
Bharanidhar Vijayakumar
Sir, okay. Thank you so much. All the best.
Operator
Thank you. Our next question comes from the line of Abhishek from Motilal Oswal. Please go ahead.
Abhishek Nigam
Yeah. Hi. Thank you so much for the opportunity. So just on the renewables capacity side, my understanding is some of the capacities were facing some, I think, land acquisition and right-of-way issues, especially for some of the wind projects. So are those getting resolved now? And is there a timeline on some of those capacities?
Sharad Mahendra
Yeah, Abhishek, as we told that we have commissioned and we have demonstrated commissioning of fresh 1.3 gigawatt of wind capacity, which faces the maximum challenge in terms of the ROW issues and implementation issues, which is almost one-third of the country’s capacity addition, which has taken place. So, we have been successfully able to overcome those challenges and the proper mechanisms are in place.
And going forward, also the projects which are under construction, we are at a very advanced stage of the ROW issues and the project execution planning is done in such a way that these are within the timelines with the solving these issues take place. So, this is a continuous process. We know the way the things happen in the country. But yes, this is something which is being monitored very, very closely. And we don’t see that as a bottleneck in not meeting the timelines within the PPA in which we have to execute the project.
Abhishek Nigam
Okay. Okay. Fair enough. Sir, second question is, while there is a good five-year out target of 30 gigawatts, is it possible to give us some sort of a capacity bridge like, say, by — I’m saying, let’s ignore KSK and O2 Power for now. So is it possible to give us a number for, say, end FY ’26 and FY ’27, just on the organic basis, if you could, capacity?
Sharad Mahendra
Yeah. See, as we say that from — we are talking, it is 12.2 gigawatt operating portfolio and the projects which are in pipeline and to be executed within the PPA timelines, you can assume that beyond 12.2 gigawatts, maybe 3 gigawatt to 3.5 gigawatt of capacity addition, around 3.5 gigawatts of capacity addition in a year ensures us to meet the — and deliver the projects on time. So, you can just maybe estimate that what is further going to happen going forward.
Abhishek Nigam
Okay. Fair enough. Just one last question from me. So, I mean, your hands are really full right now in terms of lots of projects. And so does it mean going forward, you are going to be more selective with respect to SECI tenders? And is there a specific category like we’ll do more of FDRE or hybrid, or any thoughts on those?
Sharad Mahendra
See, as we have — you rightly said that maybe meeting the 30 gigawatt by 2030, the pipeline which we have takes care of that, and this also gives us to be selective in going forward in — participating in the upcoming bids. And as we have been maintaining that any opportunity which comes, which is return accretive to our shareholders to us is what we are going to look, and we will ensure that our benchmark returns are protected, keeping those things in mind, only we will be — going forward, we’ll be participating in the bids. Perfect. Thank you so much, sir.
Pritesh Vinay
Abhishek, I may want to add. I’m too tempted, sorry.
Abhishek Nigam
Sure.
Pritesh Vinay
I too believe we have always been selective. It is not that something has changed now and hence, selective, right? Let’s not forget that India has seen in the last four years tendering in excess of 130, 140 gigawatt, right? But we have gone ahead and secured a pipeline of barely 7 gigawatts to 8 gigawatts, right? So we have been very selective, and we will continue to be so.
Abhishek Nigam
Okay.
Operator
[Operator Instructions] Our next question comes from the line of Aniket Mittal from SBI Mutual Fund. Please go ahead.
Aniket Mittal
Yes. Thank you for the opportunity. My first question actually is pertaining to wind. Aside of the execution-related issues, generally wind PLF over the past few years have also been a bit depressed. So, just wanted to understand your thoughts on that, like, in terms of building sort of wind PLF in your assumptions, are you sort of recalibrating that? What sort of PLFs are you assuming going forward?
Sharad Mahendra
Yeah, Aniket, a very important question, which is a part of our DNA within our organization. See, whenever we are planning to participate in a bid and the modeling is being done for the right tariff, we have always been very conservative in terms of the assumptions. Like the industry, in general, we have seen in case of wind has operated at P75. But for us, the benchmark is P90, which gives us enough room for such kind of deviation when we have seen the last year also that the wind speeds comparatively were lesser than what was anticipated. So, we take care a lot of assumptions in such a way that even if these things go wrong, our benchmark returns are protected and we don’t go wrong when we are executing and when the project is operational.
Aniket Mittal
And what would that P90 number be, sir? The P90 PLF number that you are…?
Sharad Mahendra
P90 number depends on lot of other factors. Assumption is the probability of going wrong.
Pritesh Vinay
So Aniket, if I may come in here, see it — so there are two, three factors that go in, right? One is the location, particular location. Second is the type of equipment that you plan to utilize there, right? And what is the rating of that equipment and what are the efficiency factors, etc., right? So it’s not a one-size-fits-all that P90 will work at all locations regardless of which equipment you use. And hence, ultimately, what works for us effectively is the LCOE number, right, instead of P90 that what is the levelized cost of energy that one is likely to achieve at a particular location for a given configuration of machine, yeah.
Aniket Mittal
Okay. Fair. And the other question was just to understand on the interest cost. In the press release, I think you’ve mentioned that the weighted average cost of debt has gone up to about 9.1%. So, just to understand that what’s the average cost of borrowing that you look at now in terms of your financing these projects, both at the project level and holdco level?
Pritesh Vinay
So it’s a mix of things, Aniket. So what has happened is that for O2 — sorry, for KSK acquisition, we drew down on a long-term debt, which was priced at a certain level, assuming a BBB credit rating profile. We have achieved higher than that. And hence, when we report in June quarter, you will see this number coming down because that number has already inched down because the credit rating is better than the base case at which it was priced. So that is one.
Second is what is going to happen is that there is a substantial amount of our borrowings, particularly all the project financing debt, which is typically linked to a bank reference rate, a bank MCLR plus a spread. So, therefore, depending on how the interest rate environment moves out and all signs seem to be a more benign rate curve trajectory going forward, there will be an impact of that.
The third factor that comes in also is the timing when your resets happen because typically, while these are long-term facilities, no bank wants an ALM mismatch. And effectively, these are floaters, right, which have annual resets. So periodically, based on when you draw down the first facility, there’s going to be an annual reset that will happen quarter-to-quarter. So it’s a combination of all these things, which ultimately reflects on this chart here.
Then second is this depending on the type of capital pool you are targeting, these costs can be number. So for example, if you want to do a three-year issuances and assume the rollover refinancing risk, the number can be much finer. What we choose to do is to ensure that for all the projects which are backed by PPA, you are doing a long tenure non-recourse project financing, right? So it’s a combination of all that from institution to institution, bank to bank, that number will vary. But largely 8.5% to 8% to 9%, that is the range typically at which you can get a long tenure project financing facility today.
Aniket Mittal
I got that. That’s helpful. I’ll join back in the queue for the question.
Operator
Thank you. The next question comes from Darsh Solanki from Axis Securities. Please go ahead.
Darsh Solanki
Yeah, thank you for this opportunity. Sir, my first question is more of clarification in nature. So post the acquisition of KSK Mahanadi and O2 Power is completed, so going forward, these two companies will get consolidated in our company, right, for our modeling purpose?
Sharad Mahendra
Yes.
Pritesh Vinay
KSK, Darsh, yes. Hopefully.
Sharad Mahendra
Yes. Sure.
Pritesh Vinay
No, no, not hopefully. Surely.
Darsh Solanki
Okay, sir. Thanks.
Pritesh Vinay
I mean, KSK is already done. O2 you will see when we report the June quarter results because that transaction got consummated only in the month of April.
Darsh Solanki
Understood. Sir, actually, my second question is regarding O2 only. So O2 in the press release, I understand that we expect that by June ’25 around 2.2 gigawatt of capacity is expected to be operational. So, can we have like a split of this 2,259 megawatts in solar wind and hybrid?
Sharad Mahendra
See, presently, when we acquired this asset operating capacity of 1,343 megawatts, out of which 271 megawatt of wind and balance is all solar. This is what we have acquired. And during the quarter, what we are seeing maybe another addition of about 500 megawatts, which will happen, which takes it to about close to 1.9 gigawatt and balance because of the connectivity and various issues, we will see in the coming quarter.
Darsh Solanki
Understood. And that would be mainly solar only, right, the commissioning of the plant?
Sharad Mahendra
Yes. Fresh capacity addition to reach 1.9 is 100% solar.
Darsh Solanki
Understood. And balance just if you can share, if still 2.2 gigawatt would also be solar or we will plan wind energy?
Sharad Mahendra
Yes. Up to 2.2 everything is solar.
Darsh Solanki
Understood. Got it. That’s it from my side. Thank you.
Operator
Thank you. Our next question comes from the line of Nikhil Abhyankar from UTI Mutual Fund. Please go ahead.
Nikhil Abhyankar
Thank you, sir. Thanks for the opportunity. Sir, recently we were also thinking of having solar manufacturing plants. It is not included in the Strategy 3.0. Can we expect that it is dropped for now?
Sharad Mahendra
No. If you see, we have kept this in abeyance. The reason is if we see that we all are aware the way the capacities — module capacities have got added in India, which is close to 100 gigawatt. So we did the evaluation, and we found basically the objective for us to go for manufacturing was when we had announced to supply chain de-risking. That scenario has changed, and we don’t see right now of the module availability at the right price as a challenge. So, we will be watchful on that. We’ll not say that we have dropped, but we have kept in abeyance. As and when we feel the need, we will be going ahead. But immediately for the current fiscal, we are not going ahead with this.
Nikhil Abhyankar
Okay. And sir, this SECI BESS capacity, can you just tell us how much was the capex done? And if a significant portion of it is done, are we also looking at using it for, say, merchant market tapping the night and day arbitrage available?
Sharad Mahendra
It is — see that this happened, the timing was such that we have not done any significant capex. It remains in single digits only. So right now, we have not done anything significant in this. And maybe single digit when I’m saying it means maybe around INR10 crores or below.
Nikhil Abhyankar
But — I mean, the project was supposed to get commissioned in March ’25 and it was canceled. I mean, it has stayed in abeyance just four months prior to it. Still the capex is only INR10 crores?
Sharad Mahendra
Yeah, yeah. We were — we had planned in such a way to commission that in 4 months’ time. That was not a challenge at all because the preparatory groundwork, the way this amount, which has been already invested was done judiciously that as and when the clarity comes because till that time also, the regulatory approvals were pending though the PPAs were signed. And the batteries, what we had ordered, we have enough other projects also, which we have — which is captive requirements of energy storage as well as other bid which we have won. So the same batteries are being used for other locations. So, we don’t see any challenge except ordering, yes, you are right, we had ordered, but this is being used in alternate projects.
Nikhil Abhyankar
Okay. And so can you just give us a timeline as to what will be the commissioning trend for the rest of the 1.9 gigawatt hours of project?
Sharad Mahendra
See, again, as I said, that the implementation, which we have made for energy storage, we have been talking about energy storage, as we said in our Strategy 3.0, we are maintaining 40 gigawatt hour, which is part of energy storage also. So, balance 1.9 gigawatt, the PPAs which are signed, we will be executing, and this is a short lead time. So, we will be doing total — we have another five projects, which are there other than this 1 gigawatt, we will be executing as per the PPA time lines, which normally is 18 months.
Nikhil Abhyankar
Sure, sir. Thank you, and all the best.
Operator
Thank you. Our next question comes from the line of Dhruv Muchhal from HDFC AMC. Please go ahead.
Dhruv Muchhal
Yeah, sir. Thank you so much. Sir, is it possible to share the run-rate EBITDA for the renewable capacities as of March end for the renewable, I mean, ex-hydro and also, if possible, the gross block that you invested? Run-rate EBITDA or run-rate revenue is also fine, however, what is comfortable?
Pritesh Vinay
So Dhruv, we don’t do that run-rate EBITDA, but you will be able to — you have the — and the IR team will be able to help you. You have the details of all the RE projects and you have the tariff because all of them have been won through an auction mechanism. It’s a public number. So, you will be able to generate that. We don’t give run-rate EBITDA. So that we will not be able to do.
From a gross block point of view, you will have to wait for some time because based on the size and significant developments that have happened, we should be in a position in some time to upload once the annual reports are completed, we will be able to upload the annual reports of all the entities. And this year, we are also going to be publishing JSW Neo’s consolidated numbers on balance sheet cash flow. So, that’s based on popular demand. So therefore…
Dhruv Muchhal
Sir, one more popular demand probably is the run-rate EBITDA because that’s a very good metric or revenue — is a good metric for us to monitor because individual projects, we have many hybrid projects too. So, monitoring or gauging it from individual projects becomes extremely difficult. So run-rate EBITDA probably is an industry standard. If as a suggestion, if you can please adopt it also. Great. Thank you so much for your time.
Pritesh Vinay
We will surely take that under advisement, Dhruv.
Dhruv Muchhal
Sure. Thanks.
Operator
Thank you. Our next question comes from the line of Amit Bhinde with Morgan Stanley. Please go ahead.
Amit Bhinde
Hello, sir. I just wanted to understand the impact that you had on from the wind speeds on your acquired portfolio because as I recollect on Mytrah, you were guiding around INR600 crores of EBITDA and that’s pretty lower now including the new acquisitions as well. And any measures that you are taking on that EBITDA now?
Sharad Mahendra
Yeah. See, one measure which we are taking, yes, it is a slightly lower wind speed impact is there on those assets. When we said we have to assume that there are assets which ranges from maybe 650 kilowatt or 850 kilowatt to maybe 2.7 gigawatt or 2 gigawatts. This is the range of the turbines which are there, which all was evaluated and considered while valuing the asset. But yes, wind speeds have had an impact there. But yes, what we are now, our operations and maintenance team is working on apart from the availability, which we have been successful in increasing the availability, which used to be 96%, 97% to 99% availability, which we have ended with is the efficiencies of the machines which are running.
So, that also is important even when the wind is there, whether the machines are there, that evaluation is in progress. And also, we have — there were some contracts which were medium-term operations and maintenance contracts, which were signed with the suppliers. Some of them we have canceled and we have taken into — during the previous year, at various stages, we have taken into our own control self-O&M. So, that also will definitely result in significant savings in the operations and maintenance cost. And also the O&M contracts, which are prevailing, which was for medium terms, we have been successful in negotiating those contracts in our favor. So all those things, we will definitely see in the current fiscal.
Amit Bhinde
Correct.
Pritesh Vinay
But if I may add to that, Amit, I would like to add to what Sharad said. So, I just put it slightly differently, whatever Sharad has said is 100% correct. Look, in any initiative, there are controllable factors and there are non-controllable factors. What one can definitely try and endeavor to do is that whatever are the controllable factors that Sharad talked about in terms of ensuring that your machine availability is up, ensuring that the focus on O&M cost reduction and getting more efficiencies out. So we are definitely at it, right?
Now, wind speed is something which unfortunately is not a controllable factor. But however, this is not a company-specific thing, right? So there are two things. One is that, obviously, when one does run these kind of processes, one looks at a longer-term horizon. right? So, we will be watching out closely. And as Sharad said, whatever can be done to salvage that aspect. And ultimately, the bottom line is this that there has to be a certain amount of risk appetite in running any enterprise, and these are inherent risks that one has to live with, yeah.
Amit Bhinde
Yes. And the second one that I wanted to understand is regarding your wind manufacturing plan that you had. So what’s the progress on that? And what is the sourcing strategy at the moment?
Sharad Mahendra
Yeah. See, in terms of wind manufacturing, I’ll just like to tell as we have said earlier we had signed the technology license agreement with Sany and they have their facilities in India, in Pune from where now all the suppliers are going to come from Pune, which is going to start sometime in quarter two and apart from that to further de-risk and optimize in terms of both cost and deliveries, we are setting up our two blade manufacturing units, our own for our captive requirements, which will be in the current year only. Both the units of blade manufacturing also will get commissioned. So, these are the two steps on the manufacturing front in the wind side we have taken.
Amit Bhinde
All right. Got that. That was helpful, sir. Thank you.
Sharad Mahendra
Thanks.
Operator
Thank you. Our next question is from the line of Mahesh Patil from ICICI Securities. Please go ahead.
Mahesh Patil
Yeah. Hi, sir. Sir, my first question is on the O2 Power. So at the time of acquisition, you had mentioned that around 2.3 gigawatt, 2.4 gigawatt should be operational by June 25. So do we have any revised timeline for that capacity?
Sharad Mahendra
Yeah. Mahesh, as I said that when we acquired the portfolio, the operating capacity has been 1.34 gigawatt and the balance work, which is in progress, so by quarter end, we are expecting close to 1.9 gigawatt operational capacity and about 300 megawatts of solar, which is spilling over in quarter two. That is the only minor change which is there. We had said 2.2 gigawatt operational by end Q1, which may spill over about small 300 megawatt maybe in quarter two.
Mahesh Patil
[Technical Issues] previously respond that you are setting up the blade manufacturing unit?
Operator
Mr. Mahesh Patil, may I request you to repeat your question, sir, you are not audible.
Mahesh Patil
Yeah. Sir, my question is regarding the sourcing part. As you have mentioned that you are setting up the blade manufacturing unit, right? So given the revised guidelines on the domestic — increased content of domestic manufacturing for wind as well, any challenges in terms of sourcing for both solar and wind equipment for the upcoming projects?
Sharad Mahendra
No. Solar, as I said earlier also that enough capacity in India is there at a very, very competitive price. So, we don’t see any challenge, and we have already been procuring now modules locally for our ongoing projects. So we don’t see as a challenge because close to 100 gigawatt of solar capacity or module manufacturing capacity is already in place in India.
Regarding the blade manufacturing, as I said that, of course, there is a draft regulation of Made in India, where in some portion, you can import. After that, you have to be on domestic. So these actions of ours in the current year, when we will be commissioning our two blade manufacturing facilities will take care of our total capacity addition plan. So, we don’t see these things as a challenge for us.
Mahesh Patil
Okay, sir. And sir, my last question is on the pipeline. So we have a robust pipeline, right? So going forward, what would be the bidding strategy? Are you looking for something like more of solar or hybrid or FDRE? Any view on that?
Sharad Mahendra
See, as I said earlier also to one of the questions, we have enough of pipeline in place and the amount of the opportunity size is so big now that we will be selective. And everything is mentioned what we have in pipeline, what we have to install, if you go to the presentation, Slide number 24, you will get all the details. But as a strategy, we will be definitely selective, ensuring that if the opportunity which is coming in is meeting within our Strategy 3.0 to reach 30 gigawatt, we have the entire pipeline in place, but we’ll be selective. And going forward, wherever we are seeing that it is return accretive, meeting our benchmark returns, we will be participating. But yes, presently, we’ll be focusing on our execution of the pipelines.
Operator
Thank you. Our question is from the line of Anuj Upadhyay from Investec. Please go ahead.
Anuj Upadhyay
Yeah. Hi. Thanks for the opportunity. Sir, just want to get a sense on how our cash flows are placed to fund this INR130,000 crores of capex over the next five years? Because what my sense is the extended KSK capacity and the Salboni will only come by FY ’29 or ’30 because it has a execution time period of four years to five years, and this would require a combined capex to the tune of close to around INR30,000 crores to INR35,000 crores. So the balance INR90,000 crores, which is largely targeted towards the renewable capacity, generally has an executable time period of, say, 2 years, 2.5 years kind of a time period. So just to get a sense on what sort of capex because you guided that the next year capex would be the tune of INR15,000 crores to INR18,000 crores. But over FY ’27 or ’28, can we see a bulk of 25-plus kind of a run rate of a capex happening at the company level?
Sharad Mahendra
See, maybe I’ll just say a few things on the numbers, what you just said and then maybe on the cash flow, Pritesh will let you know. See, one, as I said that these are all projects, which is maybe four years to five years period and more back-ended investment, which is there. And the numbers for these 2 KSK and Salboni, West Bengal project, what you said, that is a significantly higher number.
As I said earlier, the 1,800-megawatt capacity we have to execute in maybe by FY ’30, this will be at a much, much lower cost than what the normal greenfield project is. So the costs will be significantly lower for this entire 1.6 gigawatt of West Bengal and 1.8 gigawatt of KSK, which is total 3.4 gigawatt will not be in the tune of the numbers what you have just said. It will be significantly lower, one. And in terms of cash flow with the new capacities coming in over a period, how it is going to help, maybe Pritesh will just tell you.
Pritesh Vinay
So Anuj, I’ll just kind of try and repeat in a slightly different way what I said some time back. All growth aspirations, funding of those growth aspirations has to be calibrated with respect to your spending ability. And at the same time, on the other hand, managing that your leverage profile is in check. So, we will be operating between these two guardrails, right?
So from time to time, there was another question earlier, there could be some bunching temporarily, but largely, that is the endeavor. So, I would not like to get into specifics because that would not be appropriate. But what is — we can definitely kind of talk about is that for the current year, we are talking about INR15,000 crores to INR18,000 crores capital spending plan. And then it will be calibrated subsequent to that. Yeah.
Anuj Upadhyay
Okay. Fine. And next on the Vijayanagar, now the plant has been completely tied up, can we provide some kind of sustainable ROE or what P&L the plant would run that would be helpful? I believe the plant have a regulated or equity contribution of close to around INR1,300 crores, INR1,400 odd crores. So can we provide some sense on what kind of ROE it would be making on the captive arrangement?
Pritesh Vinay
So Anuj, on Vijayanagar, obviously, the tie-up is on CERC norms. But what I would also want to highlight, and this is important is this that this is a five-year tie-up. Yeah. Yeah, the tie-up is for five years because JSW Steel also has decarbonization aspirations for which they also eventually want to switch over into more and more RE, right? So therefore, with that in mind, this has been done for 5 years. Rest of the things are arithmetic. You guys are very good in doing that. So, I would not like to comment on that. But this is how you should look at it, yeah.
Anuj Upadhyay
Fair enough. That is helpful, and thank you. Wish you good luck.
Operator
Thank you. Our next question comes from the line of Rajesh Majumdar from B&K Securities. Please go ahead.
Rajesh Majumdar
Yeah. Sir, my question was actually on the lines of the last participant. So on the thermal PPAs, we are seeing a much shorter duration of five years now. Is that the trend going forward? And since you’ve locked in a lot of new coal-based capacity, is that going to be a challenge in the future in terms of the coal-based capacity?
Pritesh Vinay
So Rajesh, I would be to defer. I mean, PPAs are not for short duration. I mean, if you look at what UP did, what Maharashtra did, what West Bengal did, what Karnataka has called for, these are all 25-year bids. What I was explaining was this Vijayanagar 860 megawatt that has been tied up, that has been tied up for five years. Yeah.
Rajesh Majumdar
So the long-term PPAs are still there.
Pritesh Vinay
JSW Steel, not with fiscal trend is five-years.
Rajesh Majumdar
Okay. Yeah. So the long-term PPAs still exist for the larger…?
Sharad Mahendra
Yeah. Optional 25 years and the pumped storage is all for 40 years, which are the PPAs which are coming in.
Rajesh Majumdar
Okay. That’s useful. Thank you, sir.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Sharad Mahendra
Yeah. Thank you, everyone, for being with us today. And if anyone else has any query or any other questions, I request you to please approach our IR team. You will get a suitable reply if there are any other questions which remain unanswered today. Thank you very much.
Pritesh Vinay
Thank you. Thank you very much, and good night, everyone.
Sharad Mahendra
Good night.
Operator
[Operator Closing Remarks]