Nikhil Nigania: Okay. Good to hear that. I think a related question then is transmission. I think a point slightly alluded to during the discussion earlier. Is transmission being seen as a constraint India ramping up to 30, 40 gigs of renewable installation now? Are you seeing that as a constraint in reaching that higher renewable installation numbers probably?
Sumant Sinha: I would say the government has been so far quite proactive in building on transmission capacity. And I think a lot of transmission capacity exists in the country that can allow for the 50 gigawatts of commissioning. The only thing is, of course, that the transmission capacity is not necessarily areas that people would want to set up or maybe there’s some constraint in places like Rajasthan or Karnataka and so on. And there, there might be bottlenecks as we go forward. But when I say bottlenecks, I mean that the bottleneck will emerge after 30 gigawatts or 40 gigawatts of connectivity rather than 10 or 15 gigawatts. So there is a lot of room to go before we actually start having constraints really, really emerge.
So I would say that at least for the next two, three years, we should not be seeing any transmission bottlenecks. And the government is, as you very well know, trying to really speed up the construction of transmission projects and the auctioning of transmission projects. So they are very closely evaluating what the issues are and are trying to debottleneck that.
Nikhil Nigania: Got it. Thank you. And my last question then is, there was this one big tender, the RTC-2 tender, I think for more than 2 gigawatts, which I think has been going around for quite some time. Any update that could be shared on that from the news side?
Sumant Sinha: I’m not sure which tender you’re specifically talking about. There’s one. There’s RTC-2?
Nikhil Nigania: Yes. The one that coal was also not to be blended, coal-fired generation.
Sumant Sinha: Okay, okay, okay. No, listen, I haven’t heard about that tender for quite some time. So I’m not sure that it is live right now. But as you know, in the meantime, a number of other RTC auctions have happened. [Techie 6] was the first one that happened. That is for 200 megawatts of headline capacity, which, as you know, translates to about 3.5 gigawatts of actual RTC capacity. Then SJVN just recently did another 200 megawatts capacity, which is not actually fully subscribed to, in which we’ve done 184 megawatts. And then there’s the REMCL tender as well. So there have been three such tenders in the last few months. And as you know, a number more are due to be coming up in the next few months.
Nikhil Nigania: Got it. Got it. Thanks. Thank you so much. Those are my questions. Thank you.
Operator: [Operator Instructions] And our next question comes from Angie Storozynski from Seaport. Please go ahead.
Angie Storozynski: Thank you. So just two simple questions. One, you do lots of capital recycling and existing and future projects. And so I’m just wondering if the gains that you record on that are reflected in your EBITDA. So that’s number one. And number two is, when you show us EBITDA and debt projections, just wanted to make sure that this is proportional EBITDA and proportional net debt, meaning the portion of both that you keep as renewed net of those divestitures or asset recyclings.
Sumant Sinha: Yes. Kailash?
Kailash Vaswani: Sure. Yes. So the gains on the asset sales have not been reflected in the EBITDA line as of now. I think the accounting transaction happened subsequent to the end of the previous quarter. So that’s the reason why I think it will get accounted in the subsequent period. To your second point, where we consolidate the full EBITDA, where we own 51% majority of the assets, there the full debt also gets consolidated with us into the balance sheet. So we don’t consolidate on a proportional basis because if we are in control of the asset, then the entire EBITDA and debt sort of stays with us. We take out the minority interest on account of the joint venture partners’ interest in the project.
Angie Storozynski: I understand, but I’m just asking you – yes.
Nathan Judge: Yes. Sorry. Just to clarify, on our guidance that you see there, that is just our net. So if you look at the debt –
Angie Storozynski: So it is net of minority interest.
Nathan Judge: Yes. So those are actually net to shareholders.
Angie Storozynski: Okay.
Nathan Judge: So, I mean, so – but as far as – yes. Actually, we’re recording. We would be taking out the net or the minority position in the minority interest line. But as a projection and our guidance is concerned, it’s all net of what we currently own.
Angie Storozynski: Okay. That’s good. And then just going back to the gains on capital recycling. So, again, I mean, you’ve done a couple of those transactions in the past. And I’m just wondering, I mean, have those been a meaningful contributor to the EBITDA? I understand the difference in the timing of recognition of the gain for this latest transaction. But I’m just wondering how big of a component of EBITDA this has been or can be. Again, just I know that that’s an ongoing business. But I’m, again, wondering how big of a position of the EBITDA this is.
Sumant Sinha: So, see, again, there’s an accounting value to it. What tends to happen is that we book costs basis and accounting calculation on the capital expenditure. We’re also going to put some margins at the EPC levels. When we consolidate them, they get knocked off. When we sell those assets, those assets are marked at a higher value in our books because of the – because we are sort of selling those assets. So to that extent, the gains are smaller, but the cash flow impact is larger.
