State-Owned NLC Narrows down the Projects for Acquisition

NLC, which was earlier known as Neyveli Lignite Corp. Ltd is likely to strike a potential deal costing around Rs12,000 crore. The state-owned organization has 2 projects for acquisition i.e. Ind-Barath Power Infra Limited, which is a Hyderabad-based 700 megawatts plant in Odisha and GMR Group’s 1,370 MW coal power project located in Chhattisgarh.

NLC is likely to hire 2 consultants – that is one each from the private and public sectors so as to fulfill its due diligence, said the Chairman & Managing Director, Sarat Acharya.

The company’s public sector unit’s ideal plan is to attain 3,000 megawatts of stressed-power generation capacity. Their key strategy is to use the revenue obtained from running these projects to finance the capital expenditure.

Acharya added, “Others had come as part of the process that we have been running for stressed power projects acquisition. We are also setting up a power generation capacity of 7,000MW, which will take around six years for commissioning. Acquiring such stressed projects will allow us to generate electricity and start cash flows.”

On August 23, NLC India invited Expressions of Interest (EOI) from companies owning lignite and coal-based power plants of generation capacity of more than 2,00 megawatts for possible acquisition.

Thermal power projects having gross capacity of 25,000 megawatts were up for sale across India. Over the recent years, several power companies are finding it difficult to find stable fuel supplies as well as buyers for the power they produce as the debt-laden state-electricity boards do not want to buy expensive power. Hence, more and more power generators are being driven to debt. This has caused a few of them to sell their assets.

The state owned-NLC has even signed a project agreement to acquire Damodar Valley Corp.’s’ (DVC) 1,200 megawatts Raghunathpur project in the state of West Bengal via a joint venture company. However, the acquisition is facing legal issues due to opposition from the state government.

Acharya said that the Raghunathpur Projects has got all the other necessary clearances, but they are awaiting clearance from the West Bengal govt. The project is waiting for its clearance from the state govt. for the past 6 months.

The GMR spokesperson did not disclose any information about the project when queried through an email on Thursday. However, Ind-Barath spokesman confirmed the project development over a text message. He said, “Yes, NLC has shortlisted our Odisha plant and discussions are currently ongoing between the parties.”

NLC-India has installed power capacity of about 4,301 megawatts. They plan to set up an additional 4,000 megawatts of solar power project and are in talks with other states to set up a feasible power purchase agreement for selling electricity to the states.

Many state-owned companies such as Bharat Heavy Electricals Limited, Power Grid Corp. of India Ltd and NTPC Ltd are designing clean energy strategies. Their plans were encouraged by the many opportunities provided by India’s solar power ambitions.

India’s target is to generate 175 gigawatts of renewable energy by the year 2022. Out of this, 100 gigawatts are derived from solar power projects.

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