Three stressed power plants generate about 1,000 MW
October 12, 2015
India Power Corp is in advanced talks to buy three stressed power plants with a combined capacity of about 1,000 MW. The Kolkata based company is also looking at expanding its electricity distribution area, for which it is holding discussions with the governments of Rajasthan, Jharkhand and Uttarakhand.
Without naming the entities, India Power chairman Hemant Kanoria said, “These power generation assets are in the east and their total generation capacity is around 1,000 MW. We are in negotiations with the management and the bankers of these projects.”
Kanoria said India Power has an internal team of experts which has been advising the company on the acquisitions. The company will appoint a merchant banker to conclude the deal once the talks reach the final stage, he said.
IPCL will spend estimated Rs 500-800 crore to buy the plants, which have been built on a 70:30 debt-equity ratio. It intends to fund the acquisitions through a mix of debt and internal reserves.
Formerly known as DPSC Ltd, India Power intends to be an integrated power utility with distribution licences at Asansol and Durgapur regions. To back it up, it has set up three units of 150 mw thermal power generation capacities. Durgapur and Asansol are expected to consume about 250 mw power. The company hopes to sell the rest of the power in the spot market.
“We plan to grow our distribution business on the one hand and would be acquiring plants that can feed distribution networks. India Power will build up capacities based on demand from its own distribution areas,” said Kanoria.
Raghav Raj Kanoria, director at India Power, said: “Rajasthan plans to auction out distribution franchisees for Kota, Bikaner and Bharatpur. For Kota and Bharatpur, Rajasthan has decided on the direct franchisee model while for Bikaner it will be the public-private partnership model.”
Jharkhand plans to hand over distribution of Dhanbad, Ranchi and Jamshedpur to private companies.
At present, India Power operates 100.2 MW of wind assets in Rajasthan, Gujarat and Karnataka and has also developed a 2 MW grid connected solar power plant along with West Bengal Green Energy Development Corporation in Asansol.
The company also owns and operates a distribution licence in the region spread over 618 sq km in the coal-rich Asansol-Raniganj region. It has been serving the area for nine decades, providing power to the underground collieries of Eastern Coalfields, hospitals, etc.
