State-owned power producer SJVN experienced a significant surge in its stock value following the issuance of a Letter of Intent (LoI) for a substantial 500-megawatt solar project located in Gujarat.

The company's renewable arm, SJVN Green Energy Limited (SGEL), was the recipient of this LoI from Gujarat Urja Vikas Nigam Limited (GUVNL), marking a pivotal moment in SJVN's renewable energy portfolio.

The market response was swift and positive, with SJVN's shares witnessing an impressive 8 per cent surge in value on March 14th.

This surge came on the heels of SGEL's acquisition of the LoI for the 500 MW Solar Project, signalling investor confidence in the company's strategic direction and growth prospects in the renewable energy sector.

The ambitious solar project comes with a tentative construction and development cost estimated at Rs 2,700 crore.

Set to be established at the GIPCL Solar Park in Khavda, Gujarat, this initiative underscores SJVN's commitment to expanding its renewable energy footprint and contributing to India's energy transition.

It's noteworthy that SGEL had previously secured the 500 MW (100 MW + 400 MW Green Shoe) project through a competitive bidding process, offering a competitive tariff of Rs 2.54 /Unit on a Build Own and Operate (BOO) basis.

The bidding, conducted by GUVNL on January 25, 2024, further solidified SGEL's position as a key player in India's renewable energy landscape.

The positive momentum continued as SJVN's shares were trading at Rs 108.40 on the National Stock Exchange (NSE) at 10:18 am, reflecting a notable 7 per cent increase from the previous day's close.

Over the past year, SJVN's stock has delivered remarkable returns, showcasing its status as a multi-bagger investment with gains reaching an impressive 243 per cent.

According to a statement released by SJVN, once the Gujarat Electricity Regulatory Commission (GERC) adopts the tariff, GUVNL will execute the power purchase agreement (PPA) for the project.

Following the signing of the agreement, the project is slated for commissioning within 18 months, with a target completion date set for November 2025.

Upon completion, the 500 MW solar project is projected to generate approximately 1271.07 million units of energy in its first year of operation alone.

Over 25 years, it is anticipated to produce a cumulative energy output of 29,245.4 million units, significantly contributing to India's renewable energy capacity.

In addition to its substantial energy output, the project is expected to play a pivotal role in mitigating carbon emissions, with an estimated reduction of 1.43 million tonnes.

SJVN emphasized its commitment to aligning with the Government of India's ambitious targets of generating 50 per cent of energy from non-fossil fuel-based resources by 2030.

This shared vision has been formulated in sync with the commitment of the Government of India to generate 50 per cent of energy from non-fossil fuel-based energy resources by 2030, the company reiterated, underscoring its dedication to sustainable development and environmental stewardship.