Naveen Jindal Group Plans Rs 15,000 Crore Investment In Renewable Energy For Steelmaking Operations

The Naveen Jindal group is in the final stages of crafting a Rs 15,000 crore investment blueprint aimed at bolstering its renewable energy portfolio.

This move is set to serve as a source of captive clean fuel for its expanding steelmaking operations.

Naveen Jindal, the promoter of the listed Jindal Steel and Power, has recently announced a significant capacity expansion plan.

This initiative could potentially increase the group's steelmaking capacity to around one and a half times its current size by the end of the fiscal year 2025-26.

The forthcoming blueprint outlines the group's intention to power the new steel capacity additions by establishing 4 gigawatts (GW) of renewable power sources in-house within the next few years. This strategic move aims to reduce carbon emissions and facilitate the production of green steel.

Notably, the steel industry is responsible for nearly 8 per cent of global carbon emissions, with a substantial portion stemming from the use of fossil fuel-based power sources.

The new capacities are slated to be developed under Jindal Renewable Power Private Limited, a subsidiary of the group, according to Economic Times report.

Focus On ESG Compliance And Expansion

Responding to evolving market demands, the group is emphasising ESG (environmental, social, and governance) compliance.

"They are pursuing this initiative to align with ESG standards, as investors increasingly urge industrial companies to focus on carbon emissions reduction," stated an individual briefed on the matter who preferred anonymity.

A majority of the renewable energy capacity is expected to be generated through solar and wind power projects. Sites have been earmarked, and land acquisition processes are currently underway.

Rajasthan and Karnataka are set to host a significant portion of these projects. The group has already initiated machinery procurement for the proposed renewable energy projects and is in discussions with a select group of financiers, according to sources.

Investment Focus And Capacity Expansion

In its latest investor presentation, Jindal Steel and Power underscored its commitment to continued investment in India. The company's primary focus for investment remains steel and ancillary businesses, including mines, ports and power.

Additionally, the company plans to invest in green technologies to decarbonise its steel business.

The group aims to elevate its steelmaking capacity to approximately 15 million tonnes per annum by 2025-26, up from 9.6 million tonnes per annum recorded in 2022-23.

The additional capacity is primarily directed towards the production of hot-rolled and cold-rolled steel, which finds extensive applications in rapidly expanding sectors like automotive and construction.

For instance, India's annual highway construction of nearly 10,000 kilometres necessitates significant quantities of steel for guard rails and other infrastructure components.

Other steel giants such as Tata Steel and ArcelorMittal Nippon Steel have also announced plans to establish captive green power projects to transition to carbon-neutral steelmaking processes.