Adani Makes Its First Hydro Bet

Shares of Adani Power Ltd rose 4% to ₹634 apiece on Monday after the company announced a joint venture (JV) with Bhutan's state-owned utility Druk Green Power Corp. to build a 570 MW hydroelectric project at Wangchhu.

- Manish Joshi

Adani will hold a 49% stake in the JV, which will see an initial investment of ₹6,000 crore. Since its holding is below 50%, the JV's financials will not be consolidated line by line but would reflect in Adani's net profit as share in JV.

The project's initial capacity may appear modest versus Adani's 18.1 GW thermal capacity, the largest among private players in India. But it is Adani's first hydropower venture, and aligned with its goal of setting up 5,000 MW of hydropower capacity in Bhutan.

Also, the profitability of hydropower is generally considered superior to that of thermal power, since it relies on water as the primary source of energy rather than non-renewable fuels required. In addition, hydro is regarded as a more stable and predictable form of electricity production when compared with renewable sources such as solar and wind.