Lloyds Metals and Energy has signed two power purchase agreements (PPAs) with Hinduja Renewables for sourcing captive solar power. The first PPA is for 10.7 MW of solar power, and the second is for 50 MW.

A share subscription and shareholders’ agreement were inked simultaneously between Lloyds Metals and Energy, Hinduja Renewables Energy, and HR Godavari. Under the agreement, Lloyds will subscribe to at least 26% of the total paid-up equity share capital of HR Godavari. This special-purpose vehicle was incorporated jointly with Hinduja Renewables.

The equity shares to be subscribed will be fully paid up, with a face value of ₹10 (~$0.12) each.

This equity subscription is being undertaken to ensure compliance with the requirements under the electricity rules for captive power projects. The agreement’s key terms include significant rights for Lloyds, such as pre-emptive rights to maintain its minimum shareholding in case of future share issuance.

Lloyds will also have affirmative voting rights on critical matters, including alteration of charter documents, changes in capital structure, initiation of liquidation or winding-up proceedings, mergers and acquisitions, reorganization, change in the company’s legal status, any amendments that could impact the captive status of the project, or abandonment of HR Godavari’s power supply business.

The Lloyds Metals Board had approved an investment to source 100 MW of solar power through the group captive route. In its annual report for the financial year 2024-25, the company noted that it plans to invest ₹450 million ($5.27 million) in renewable energy projects for captive consumption. With this investment, the company expects significant cost savings of up to ₹1 billion annually for its mining and pellet operations, with an investment payback period of less than five months and an internal rate of return (IRR) of 251%.

According to Mercom’s India Solar Open Access Market Report, 6.9 GW of solar open access capacity was added in India, surpassing the annual capacity additions of all previous years. The demand has been driven by industries rushing to advance their clean energy adoption, and initiatives like green cement, responsible steel, among others.