NTPC, a state-owned power producer is evaluating seven Coal-based Power projects for possible acquisition, which have been put on sale by private developers.
NTPC, the largest power producer in the country, is first time looking for its growth through acquiring power plants. There are seven Coal-based Power plants on its radar. These projects belong to developers who are not in the position to continue with the projects and those who are operating plants but currently not capable to run continuously.
The company may looking for assets which having at least 2,000 MW capacity and units that already have land, water, Coal supply pact, environmental clearances, power purchase agreement and all required permissions from authorities. After looking quality of Power plants and equipment condition, NTPC will decide to make investment on it.
Funding for the acquiring power plants would not be difficult for NTPC; it has enough domestic & foreign investors because Power sector has been giving good returns on the long term investments.
“Power sector is not for those wanting quick returns. It is also not for fly-by-night operators. A long term stay in the segment will give good returns”, said by Arup Roy Choudhury, the Chairman & Managing Director of NTPC.
NTPC plans 30% equity and 70% debt combination for acquire.
Independent power producers of India have been hit by slow economic growth, high borrowing costs, lack of fuel supply, delay in environmental & forest clearances and poor financial health of state electricity boards. Economic growth slowed to 5% at the end of FY12, the slowest in a decade.
Instability in the Indian rupee also affected power developers who import Power plant machinery like boilers, turbines & generators and have exposure to forex loans.
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