Lanco seeks restructuring of Rs 1000 crore loan of Andhra Pradesh power plants

 

Lanco Group has approached lenders for restructuring of Rs 1000 Crs debt of two of it gas based power projects in Andhra Pradesh and to reschedule the repayment till January 2018. It has also sought similar reprieve from lenders for some of its power plants under Reserve Bank of India's 5/25 formula. 

Lanco Kondapalli Power Limited (LKPL), Lanco Group company, operates three gas based power projects in Andhra Pradesh. Of this, two plants, Unit-II and III, are not able to operate due to lack of gas supplies from KG-Basin. Unit-III is yet to declare Commercial Operation Date.

Between these two units the debt is around Rs 2400 Crs for a capacity of 1100 MW. 

The Group is also in the process of approaching lenders to rescheduling of loans of some of its power plants under the Reserve Bank's 5/25 Rule.

This rule enables a bank to extend loans to an infra developer for 25 years with an option to rewrite or reset the terms of the loan or transfer it to another bank or financial institution after five years.

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Odisha to extend MoUs of 10 IPPs by month-end…

 

The Odisha government has decided to extend the lapsed memorandum of understanding (MoU) with 10 independent power producers (IPPs).

"Based on the progress made on their projects, we have decided to sign fresh MoUs with 10 IPPs. The new pacts will be signed by the end of this month”, said a senior government official.

The IPPs whose MoUs are to be extended are GMR Kamalanga Energy Ltd, Lanco Babandh Power, Monnet Energy, Jindal India Thermal Power Ltd (JITPL), Ind-Barath Energy Utkal Ltd, CESC Ltd, Visakha Power, Mahanadi Aban Power Ltd, BGR Energy Systems and Maa Durga Power Company Ltd.

The IPPs have to retain at least 51% stake in their power projects for a minimum of three years from the date of commissioning of their plants, as per the new MoU framed by the state government.

Also, any stake sale beyond this lock-in period will need prior permission of the state government

According to the terms set in the new draft MoUs, the IPPs have to comply with the mandatory clause to promote employment among locals.

The clause stipulates that industries setting up their projects in the state have to reserve 90% jobs for locals in the unskilled and semi-skilled category, up to 60% in skilled category and 30% for the supervisory and managerial cadre while giving them the option to fill up the post of senior executives from the open market.

The IPPs also have to take steps to develop ancillary and downstream units around the mother plant.

It may be noted that the lapsed MoUs were impeding the progress of power projects since the banks and financial institutions were reluctant to provide funds to the developers.

So far, two IPPs- Sterlite Energy and GMR Kamalanga Energy have commissioned their units. While Sterlite Energy has fully operationalized its 2400 Mw coal-based plant at Burkhamunda near Jharsuguda, GMR has put on stream two 350 Mw units of its plant at Kamalanga in Dhenkanal district.

The rest eight IPPs were in advanced stage of commissioning their projects.

The state government had entered into MoUs with 29 developers for establishment of coal-based projects. Together, these projects have a generation capacity of over 37,000 Mw with the state share about 6000 Mw.

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Lanco said to consider sale of Australian Griffin Coal division...

 

Lanco Infratech Ltd, India’s second biggest private power producer, is considering selling its Australian unit Griffin Coal Mining Co. to help repay debt, three people with knowledge of the matter said.

Lanco is examining options including a full sale of Griffin Coal, which it bought for 750 million Australian dollars ($665 million) in 2011, said two of the people, asking not to be identified as the deliberations are private. The company is also in advanced talks to divest a hydroelectric power plant in India, two people familiar with the matter said, without naming a buyer.

Lanco is seeking to sell the unprofitable Griffin Coal unit after agreeing with banks to restructure debt that ballooned to Rs.33,900 crore in September. It is among foreign companies whose coal acquisitions in Australia have soured as prices for the fuel fell for three straight years.

Nagaprasad Kandimalla, who ran Griffin Coal, said on Thursday in a phone interview that he quit to join a political party, without elaborating. He declined to comment on Lanco’s plans to sell the unit.

Power-station coal prices at Australia’s Newcastle port, an Asian benchmark, fell 1% to $85.41 per tonne for the week ended 3 January, according to data from Global COAL. Prices slid 6.5% in 2013, the third year of declines.

A. Narasimhan, a Lanco spokesman, declined to comment. The company’s shares have slumped 44% in the past year while India’s BSE Sensex advanced 5.2%.

Griffin loss
Griffin Coal’s loss before interest, tax, depreciation and amortization almost doubled in the fiscal year through March 2013 to Rs.105 crore, Lanco said in May without giving a reason. Its mines in Western Australia’s Collie Basin produce 4 million tonnes of coal a year, and Lanco plans to boost output to 18 million tonnes by fiscal 2018, according an August presentation.

Lanco approved a debt restructuring proposal from its banks, according to a December exchange filing that didn’t include details of the plan. Its lenders include State Bank of India and ICICI Bank Ltd, according to Lanco’s latest annual report. Lanco’s debt has swelled more than fourfold since March 2010, data compiled by Bloomberg show.

The company runs a 70-megawatt hydropower plant in Himachal Pradesh, according to its website. Philip Chacko, then director of investor relations at Lanco, said in January 2012 that the company was seeking to raise as much as $750 million by selling a stake in its power business to private- equity investors.

Lanco plans to sell stakes in other power projects besides the hydropower facility, two of the people said.

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Reliance Power, Lanco seek higher tariffs for the Concentrating Solar PV Projects...

 

Solar power plants of Reliance Power, Lanco and others, are seeking higher tariffs saying that the data on solar radiation provided by the government was faulty which has led to lower generation.

Several companies have filed petitions before the central regulator, seeking higher tariffs jut as a panel chaired by Deepak Parekh recommended compensation for Tata and Adani's higher costs of generation.

At least three solar thermal power project developers with mandate to commission total 250 mw of capacity have moved petitions before the Central Electricity Regulatory Commission (CERC) seeking higher tariff.

Reliance Power subsidiary Rajasthan Sun Technique Energy, Lanco Group's Diwakar Solar Projects and Godawari Power and Ispat owned Godavari Green Energy, in their respective petitions, claimed that the solar radiation data shared by ministry of new and renewable energy (MNRE) are incorrect and solar thermal projects may not be able to generate power as per the projection.

According to an executive with one of the petitioners, the government's flawed data may take a toll on the viability of all the existing and upcoming solar power projects in Rajasthan, which has emerged as a solar hub of the country. The regulator is yet to admit these petitions. India's solar power generation capacity is largely concentrated in the states of Gujarat and Rajasthan.

"At the time of bidding under the Centre's Solar Mission, we banked on ministry of new and renewable energy's data on 'direct normal irradiance' for Rajasthan.

However, it turned out 15%-20% less than ministry's projections for solar radiation, which is the only fuel for our kind of projects.

It means, our project will have that much less electricity generation and hence return on investments," said the executive requesting anonimity. He added that weak Rupee too shot up project cost. Under solar mission's first bidding round held in 2010, NTPC Vidyut Vyapar Nigam selected seven developers to commission 470 mw of solar thermal projects for tariff of .`0.49-12.24 per unit. Reliance Power and Lanco Group quoted .`11.97 and .`10.49 per unit and bagged 100 mw projects each, which are under commissioning.

Godawari Power that quoted .`12.20 per unit announced commissioning of its 50 mw project mid-last year.

Earlier in September 2013, the Association of Power Producers also wrote to the union minister Farooq Abdullah requesting the necessary support by offering compensatory tariff to the project developers.

"The bidders had no other source of verifying the DNI data and could base the bid on DNI range provided by MNRE only," read a letter from the association director general Ashok Khurana. He stated that the developers could find the actual DNI only after their data could be independently collected after the projects were awarded.

DNI is the amount of solar radiation received per unit area by a surface that is always held perpendicular to the rays that come in a straight line from the direction of the sun at its current position in the sky. As per the original deadline, developers were expected to commission their projects by May 2013, which was extended by 10 months by the ministry.

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Lanco says it got favourable APTEL ruling in Amarkantak issue...

 

Lanco Infratech's received a favourable verdict on its year-long dispute with Haryana Power Generation Corporation (HPGCL) over the second unit of its Amarkantak power plant.

“As per the Appellate Tribunal for Electricity’ (APTEL) order, Amarkantak Unit 2 shall be paid regulated tariff based on the actual capital cost of the project. This would result in sustainable and profitable operation of the project at full capacity,” said Lanco, in a press release today. The exact tariff for the power plant, is yet to be known as the order has not been made public.

The 300 megawatt second unit which was commissioned, could not start generating due to the dispute, can now start generation. The power generator's power purchase agreement with Power Trading Corporation (PTC) to supply to HPGCL, was terminated. This was over the non-compliance of certain PPA covenants.

The receivables from this unit have been pegged at Rs 195 crore, by the end of the second quarter. The first unit of coal-based Amarkantak power, which is located in Chhattisgarh, has been generating power and earning revenues, unlike the second unit. 

Lanco's Rs 7,700 crore debt recast was approved by its lenders, last month. Amongst other developments, Lanco said that it has two cases pending verdicts with APTEL and that they were expecting favourable judgments.

“Once tariff orders are passed, we will take around six months for payments to be cleared. We expect the payments to come over time and not immediately,” said Adi Babu, the chief financial officer of Lanco, told Business Standard in an interview after its debt recast was approved.

The release of payments from its power plants is one of the positive developments that the company had expected after its corporate debt restructuring (CDR) package was approved by the lenders. As its payments from Karnataka state utility as well as that of Haryana is cleared, the company expects its business to start turnaround by March.

Source: Business Standard

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Policy patronage puffs up NTPC’s power show while private peers lag...

 

On the face of it, state-run power major NTPC continues to outperform most of its private peers which have entered the fray in less than a decade, by raking in higher profits in relation to revenue. However, this has mostly to do with relative regulatory flexibility and policy support enjoyed by the PSU’s plants, with little contribution from the company’s operational efficiency.

During the July-September quarter, NTPC posted a net profit of R2,490 crore on a revenue of R16,415 crore, a margin of 15%. In comparison, private players Adani Power and Lanco Power posted heavy losses during the quarter while Tata Power and JSW Energy made modest profits. Only Reliance Power has posted margins slightly higher than NTPC during Q2 at 19%, thanks to efficient capacity utilisation at its Rosa and Sasan plants.

All NTPC thermal power stations operate under the protective cost-plus regime, while private firms which have bagged projects through tariff-based competitive bidding face commercial risks at every stage. Power projects are financed in a 7:3 debt-equity ratio. While NTPC is entitled to 15.5-16% return on equity (minimum 15.5% RoE and additional 0.5% as incentive when projects are completed on time) from its cost-plus projects, there is no assured return on projects awarded through the bidding route. Non-automatic pass-through of fuel costs (which have risen in the case of most plants) and a weak payment security mechanism are other irritants faced by the private players.

Pertinently, NTPC had lined up massive capacities of over 40,000 MW for implementation under the now-discontinued cost-plus (MoU) regime before the tariff-based bidding regime was made mandatory in January 2011.This means the PSU would continue to be insulated from the risks posed by the tariff-based bidding regime for some more years. Including its existing capacity of 42,500 MW, 20,000 MW under construction and another 40,000 MW for which the company has entered into MoUs with distribution companies, a massive 1 lakh MW capacity of the PSU would be out of the tariff-based bidding mechanism.

A recent study by the Central Electricity Regulatory Commission (CERC) has found that in 12 out of 14 cases, levelised cost-plus tariffs were higher than those discovered through bidding within a range of 4-20%. This, despite the report excluding subsequent capital expenditure allowed under the cost-plus dispensation for the purpose of comparison.

While Adani Power is losing Rs 1,400 crore a year or thereabouts on account of additional fuel costs on power supplied to discoms of Gujarat and Haryana from its Mundra power plant, Lanco must run its plants at less than contract capacities due to domestic fuel shortage. The average plant load factor (PLF) of Lanco's generating stations worked out to be 47% against the operational threshold of 85% during Q2 this fiscal. Profits reported by Tata Power and JSW Energy were just nominal (less than 1% of total revenue).

While private developers bear all risks of the bidding regime – those relating to project execution, fuel price, demand and payment – NTPC remains insulated from such vagaries. For the PSU, if project cost escalates due to delays in competition, the extra expenditure can be capitalised and the burden passed on to the distribution companies as fixed charges. Similarly, the developer can recover additional fuel costs from discoms if it has to import coal owing to domestic fuel shortage. Even if discoms fail to lift (costly) power generated from imported coal, they will have to pay fixed charges to the PSU. That means there is little financial impact on a company like NTPC if discoms do not buy power from its plants.\

“There is no level playing field between NTPC and private players as they are operating on different footings,” said former Union power secretary RV Shahi, referring to competitive bidding and cost-plus regimes. The cost-plus system ended on January 5, 2011, giving way to mandatory bidding regime.

Private developers which bagged power purchase contracts by participating in bidding have to bear fuel price risks for 25 years. If a discom refuses to take allocated power, the developer can sell electricity in the open market. However, that is easier said than done, since finding an alternate buyer could prove tricky.

The unanticipated rise in fuel costs have proved to be a problem for private power companies. Tata Power and Adani Power are struggling to get the discoms agree to tariff hikes of 59 paise/unit and 80 paise respectively for their Mundra projects, even though the Central Electricity Regulatory Commission has recommended compensatory tariffs.

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Lanco in talks with CESC to sell Budhil Hydro Power asset...

 

Lanco Infratech is in talks with Kolkata-based CESC to sell the Budhil Hydro Power Project, sources with direct knowledge said. Deal talks are hovering around Rs 750 cr for the 70 MW hyro power project in Himachal Pradesh, negotiations are still on, sources said.

Macquarie is the advisor to Lanco for sale of Budhil Hydro Project. Lanco needs to sell assets and infuse cash into the company to fulfill the terms of CDR (Corporate Debt Restructuring), a source said. A consortium of lenders has given a nod to a Rs 7,700 cr CDR package.

Lanco said, "the information is not true and we do not wish to comment on media speculation." Sanjiv Goenka of CESC was unavailable for comments on the development.

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Lanco Infratech has got the Lender's approval for the CDR for the Rs. 4,400 Crores debt...

 

Power generator Lanco Infratech got a Rs 7,700 crore breather from its bankers as they approved a proposal to restructure its debt, today. The corporate debt restructuring (CDR) will allow the company a two-year interest holiday.

The lenders will restructure debt of Rs 4,400 crore and non-fund based exposure like bank guarantees and letters of credit worth Rs 3,300 crore.

It will also get additional funds of Rs 2.500 crore from the bankers. Of this, Rs 1,060 crore will be non-fund based. “We will use the additional funding vendors, suppliers and other service providers,&" said Adi Babu, chief financial officer of Lanco Infratech. The company has outstanding payments of around Rs 1,500 crore. It will also spend yet another Rs 1,000 crore to pay for impending work.

The promoters of the company, which includes the chairman Lagadapati Rajgopal, will have to bring in Rs 153 crore as their contribution. The payment will have to made before the signing of master restructuring agreement, which is expected to be signed by the end of the month.

As per the agreement, lenders will also reduce the interest rates by 2.5% for the first 3-4 years. This shall be compensated in the subsequent years as it will increase by 4.5%.

“The moratorium will ease the liquidity and will help us ease existing activity. This will help us make a comeback in engineering, procurement and construction (EPC) business. We will go ahead with our EPC business aggressively,&" Babu told Business Standard. He also expects business to normalise by March.

In the last 10 months, activity on the company's EPC business was stalled. In addition to slowdown in EPC business, Lanco's troubles which took it to CDR include frozen payments from state electricity boards (SEBs), leading it into a huge funding gap. The power generator is yet to receive as much as Rs 2,000 crore from power distribution companies in Karnataka as well as Haryana.

“There are two tariff orders pending with Central Electricity Regulatory Authority and Appellate Tribunal for Electricity (APTEL). Once these orders and judgements are passed, we will take around six months for payments to be cleared. We expect the payments to come over time and not immediately,&" said Babu.

Lanco has a power generating capacity of as much as 4,732 megawatts. The power business, like many other assets in the country, was affected by issues other than delayed payments like lack of fuel supply to both its coal and gas-based power plants. Earlier, the company had said that prevailing macro-economic conditions have affected it.

The company maintains that a complete turnaround in the power sector would happen only if the government provides fuel, especially for those projects which are completed. The state electricity boards should also increase tariffs to consumers and should be in a better position to buy more power as opposed to going for power cuts.

“Once these corrective measures are taken by the government, it will help the sector make a turnaround. But for the company, we expect many issues to be resolved by March expect for fuel for our gas-based power plants,&" said Babu.

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Lanco Tanjore Power receives SWORD OF HONOUR award...

 

Lanco Infratech Limited (LITL), one of India’s largest integrated infrastructure enterprise, has announced that its unit, Lanco Tanjore Power Company Limited (LTPCL), operating 120 MW combined cycle power plant in Tamil Nadu has bagged the coveted SWORD OF HONOUR award from British Safety Council in the category of ‘Health and Safety Management System’ for the year 2013.
 
The award which acknowledges the company’s excellence in the health and safety bracket was presented to LTPCL’s Chief Executive Officer P. Panduranga Rao from Alex Botha, Chief Executive Officer of the British Safety Council in a grand ceremony at the Goldsmith’s Hall in London.
 
Commenting on the occasion, P. Panduranga Rao, CEO, Lanco Tanjore said: “This is a proud moment for Lanco Group. Very few companies have received this award from the British Safety Council till now. It marks the sincere and responsible efforts that Lanco put into each of its projects to ensure the maintenance of the highest safety standards and creation of an amicable, secure work environment for its employees.”
 
In order to compete for the SWORD OF HONOUR award, LTPCL first had to attain FIVE STAR rating in the British Safety Council’s health and safety management audit scheme with a minimum score of 92%. LTPCL had to achieve another 80% to receive SWORD OF HONOUR, making it the first ever gas-based combined cycle power plant in India to scale the heights of achievement in the field of Health and Safety.
 
British Safety Council’s SWORD OF HONOUR award is designed to recognize and celebrate health, safety and welfare management excellence. The award is open to organizations around the world who have achieved the maximum five stars in the British Safety Council’s audit programme.

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Gas-hit Lanco seeks govt help to save AP power project...

 

Invoking its rights under the company laws, infrastructure major Lanco has rushed to the ministry of power and the corporate affairs ministry, urging them to suspend two key provisions in the accounting standards (AS) to save its gas-based Kondapalli power project in Andhra Pradesh, which has come to a standstill after a complete stoppage of supplies from Reliance Industries' KG-D6 block.

Lanco Kondapalli Power (LKPL), an independent power producer of the Lanco group, has written to the government seeking changes in the accounting norms that would allow the company to capitalise its borrowing costs and other expenses being incurred in the project pending completion of the commissioning activities that are delayed due to stoppage of KG-D6 gas supplies.

"We are seeking intervention of the corporate affairs ministry to suspend two key accounting standards dealing with 'accounting for fixed assets (AS-10)' and 'borrowing cost - suspension of capitalisation (AS-16)' citing unprecedented fuel and regulatory challenges beyond the control of the company. Once approved, the changes would benefit not only us, but close to 9,300 MW of gas-based power that are ready for commissioning but are without any gas," LKPL director and CEO, P Panduranga Rao.

Apart from Lanco, around 12 other gas-based projects, totalling a capacity of close to 8000 MW and investment of about Rs 45,000 crore, are under an advanced stage of construction and ready for commissioning but are without any gas allocation.

All these projects were constructed on promise of domestic gas allocation.

The projects are owned by companies such as GMR, Beta Infratech, Torrent, Reliance Power, GSECL.

As per AS-10, if the interval between the date of a project is ready to commence commercial production and the date at which commercial production actually begins is prolonged, all expenses incurred during this period are charged to the profit and loss statement. LKPL wants a relaxation in AS-10.

Similarly, the company wants a relaxation in AS-16, which states that the capitalisation of borrowing costs should be suspended during extended periods in which active development in interrupted.

According to LKPL, the disruption in gas supplies has delayed the commercial operation date of its 742 MW Kondapalli Stage III (the company has got project commissioning date extended by lenders from January 2013 to January 2015) by two years but the company expenses are being treated under revenue head subject to tax liability and this should be relaxed.

The Rs 2,610-crore project has a debt component of Rs 1827 crore financed by six lenders with Axis Bank as the lead lender.

Under Section 211 (4) of the Companies Act, 1956, a company on its own can also apply to the government to seek modification to the applicability of any requirements of the Act regarding matters to be stated in its balance sheet and profit and loss account, Kumar said.

 

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250 MW solar projects awarded to 26 players by punjab government

 

Government of Punjab has awarded Solar Projects to 26 private players for 250 MW capacity which will be having investment requirement of around Rs. 2,500 to 3,000 Crorers. 

 

Some of the players to whom the projects awarded are Lanco Solar Energy, Punj Lloyd Infrastructure, Moser Baer Clean Energy, Essel Infra Projects, Asopus Infrastructure (an India Bulls company), Welspun Solar, Azure Urja etc.

 

These Projects are awarded in two categories (i) Category I having project capacity of 1 to 4 MW (ii) Category II having project capacity of 5 to 30 MW. Under Category 1, 50 MW capacity has been awarded to 18 companies and Under Category II, 200 MW capacity has been awarded to 11 companies.

Complete list of all the selected bidders are depicted below:

250 MW Solar Projects under Solar RfP
Developer's Name	Project	Capacity (MW)	Tariff (Rs./Unit)
Category II: 5 to 30 MW
Azure Urja Pvt Ltd	Project - 1	15	7.67
Azure Urja Pvt Ltd	Project - 2	15	7.97
Solairedirect Energy India Private Ltd		20	7.99
Welspun Solar Punjab Pvt. Ltd.	Project - 1	20	8.33
Welspun Solar Punjab Pvt. Ltd.	Project - 2	10	8.42
Punj Lloyd Infrastructure Ltd		20	8.49
Moserbaer Clean Energy Limited	Project - 1	15	8.52
Moserbaer Clean Energy Limited	Project - 2	15	8.63
Asopus Infrastructure Limited	Project - 1	10	8.58
Asopus Infrastructure Limited	Project - 2	20	8.66
Essel Infraprojects Ltd	Project - 1	10	8.65
Essel Infraprojects Ltd	Project - 2	20	8.70
Lanco Solar Energy Private Limited		10	8.74
Total		200	8.41
Category I: 1 to 4 MW
WAA Solar Pvt. Ltd	Project - 1	2	7.20
WAA Solar Pvt. Ltd	Project - 2	2	7.47
T R Energy & Agro Private Limited		2	7.75
International Switchgears Pvt. Ltd		1	7.75
Aditya Meda Sales Ltd.		4	7.85
Shan Solar Pvt. Ltd		1	7.89
Supreme Infrastructure India Ltd		4	8.25
Azure Urja Pvt. Ltd		4	8.28
SAR Capital Pvt. Ltd		4	8.29
Focal Energy Wind India Pvt. Ltd		4	8.30
Atma Powers Private Limited		2	8.41
Allianz Group LLC		2	8.45
Nexgen Solex Pvt. Ltd		1	8.45
I K Energy Pvt. Ltd		1	8.48
Asopus Infrastructure Limited		4	8.49
Abundant Ventures LLC		2	8.55
Welspun Solar Punjab Pvt. Ltd		2	8.56
Mokia Green Energy Pvt. Ltd		4	8.59
Earth Solar Pvt. Ltd		4	8.70
Josan Foods Private Limited		1	8.71
Total		51	8.22

 

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Additional Reading...

http://economictimes.indiatimes.com/news/news-by-industry/energy/power/250-mw-solar-power-projects-awarded-to-26-private-players/articleshow/21281755.cms

http://www.eai.in/360/news/pages/10360

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Coal India expects to complete the FSA signing within 15 days from now…

Coal India is expecting to resolve the fuel supply agreement (FSA) deadlock in next two weeks and enter into agreements with all the proposed power plants by first week of June 2012.

 

CIL has prposed to enter into an FSA with 48 power plants which are commissioned between April 2009 and December 2011. Currently around 14 private and public companies have signed  long term FSAs with CIL.

 

However some of the companies are still to sign agreement out of which the public sector power major NTPC is one of them.

 

NTPC is not willing to sign the new FSA proposed by CIL and want certain changes in the same. Out of which the prominent are:

 

• To have similar penal and force majeure conditions as was in the pacts signed till March 2009.
• Removal of the stricter force majeure clauses passing the buck on the buyer even for CIL's failure to procure spares and others.

 

However, despite the refusal of FSA signing by NTPC and few others, already some major companies have either initiated the process of signing FSAs or have already entered the pact.

 

These include Lanco, Reliance Power, CESC Ltd and Bajaj Energy.

 

Adani Power, which requires supplies for nearly 1500-2000 MW, is yet to enter into a pact.

 

 

 

 

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More Literature on this topic:

• http://www.thehindubusinessline.com/companies/article3439563.ece?homepage=true&ref=wl_home
• http://www.infraline.com/News/Coal-India-Hopes-To-Resolve-Fuel-Supply-Agreement-Deadlock-In-Next-Two-Weeks/1/5/1/05_21_2012.htm

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More and more companies are signing Fuel Supply Agreements with Coal India…

It seems that despite criticism on the draft of Fuel Supply Agreements (FSAs), more and more private power producers are queuing up to sign FSAs with Coal India; CESC Ltd (Kolkata based) is the latest to join the league.

 

CESC sought to sign two fuel supply agreements with below mentioned Coal India subsidiaries

(i)  Bharat Coking Coal Ltd, and

(ii) Eastern Coalfields

 

Both of these agreement will cater the assured coal supply to CESC’s 250 MW unit at Budge Budge in West Bengal.

 

Update on some other power producers

• Earlier, the Reliance Power-controlled Rosa Power in Uttar Pradesh signed a fuel supply deal for three units of 300 MW each.
• Lanco signed agreements with the Singrauli-headquartered Northern Coalfields Ltd (NCL) for its 2 X 600 MW Anpara thermal power station, also in Uttar Pradesh.
• Bajaj Energy, a relatively smaller private player, has also signed a deal with the Ranchi-headquartered Central Coalfields Ltd for its 4 X 45 MW power plant in UP.
• Adani Power is the only major private power producer that has yet to enter into a fuel supply pact with Coal India. The Ahmedabad-based company is reportedly in need of coal supply for 3-4 units.
• In the public sector, NTPC is still negotiating the terms of the agreement with Coal India. The company, however, gets assured supply from Coal India through existing agreements.

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India achieved 89% target of National Solar Mission Phase I with commissioning of 125 MW Solar Projects out of total 140 MW…

Power India found that with commissioning of 125 MW Solar PV Projects, India has commissioned 89% of its allotted capacity for the first phase of the National Solar Mission.

 

According to NTPC Vidyut Vyapar Nigam (NVVN), which executes the bidding and trades power with the developers, it  could have been 100% if hiccups like allegations against Lanco and delays by some other developers had not taken place.

The NVVN had signed power purchase agreements (PPA) with 28 solar power developers for 140-MW solar photo voltaic (PV) projects in January 2011, out of which 125-MW of capacity stands commissioned currently.

According to Mr. Tarun Kapoor, Joint Secretary, Ministry of New & Renewable Energy;

"The progress so far is very good as most of the projects are commissioned. The delayed projects have been given one month extension with a part of their bank guarantee encashed,"

For solar thermal sector, power purchase agreements were signed for 27 projects for a capacity of 470 MW in batch 1. They would be commissioned by May 2013.

 

One of the major participating companies in the mission, Lanco Infratech recently faced allegations irregularities such as creating front companies. The investigative report on the matter will soon be presented, officials said.

The solar PV projects under batch 2 of phase 1, with the selected capacity of 340 MW, signed the PPA in January this year and will commission by February 2013. These projects are highly awaited as this round of bidding saw some big names in the solar energy market quoting tariffs as low as Rs 7.49/unit.

"The projects under batch 2 are under construction and we are hopeful that they will start commissioning in time," said Kapoor. The ministry also hopes to achieve grid parity in next five years. Mission statement has set a target to achieve 20,000 MW of solar generated power by 2020.

The total installed capacity of solar generated power in the country stands at 503.9 MW so far. The total investment, as estimated by the ministry is about Rs 6,000 crore.

 

 

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Power India – A popular blog on Indian Power Sector

This work is licensed under a Creative Commons license.

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Lanco completed Asia’s largest multi-developer, multi facility 56 MW Solar PV Park in Gujarat…

Lanco Solar, the fully owned subsidiary of Lanco Infratech completed Solar Photovoltaic Power plants aggregating to 56 MW in Gujarat. These include three plants of total 35 MW which are owned by Lanco Infratech itself and additional 21 MW developed as turnkey EPC projects for the following developers:

• GHI Energy : 10 MW
• Gujarat Power Corporation : 5 MW
• GSPC Pipavav Power Company: 5 MW
• Gujarat State Electricity Corporation: 1 MW

As per our estimation these power plants will generate around 90 Million Units (kWhs) of green electricity annually which will result into reduction of around 85757 tonnes of CO2 annually.

 

As stated by Mr. V. Saibaba (CEO Lanco Solar)

“We came to Gujarat in 2009 to explore the possibility of setting up our Solar business here. The visionary approach of the Hon`ble Chief Minister and the attitude of Government of Gujarat have been very positive for promotion of solar energy. Gujarat is at the forefront of solar development in the country today, with its excellent solar radiation, progressive solar policies and conducive business environment. We look forward to our continued growth here over our existing 56 MW, that we have built as a Developer & an EPC player in the last one and a half years in Gujarat”

We found that the said Gujarat Solar Park is Asia’s largest solar park and has been dedicated by Hon’ble Gujarat Chief Minister, Mr. Narendra Modi to the nation on April 19, 2012. The Park is the first of its kind in the world, being the largest, multi-developer, multi-facility park to encourage investment in the sector.

 

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Lanco missted the quarterly repayment of loan…

Lanco Infratech has missed its quarterly repayment of loan raised for its 1,200-mw imported coal power project at Udupi in Karnataka as the poor health of state distribution companies is taking a toll on power utilities.
Lanco Infratech's subsidiary Udupi Power Corporation Ltd (UPCL) was unable to make a debt repayment of 90 crore that was due on January 15, as it has not received payments totaling 450 crore from the state distribution companies (discoms) in Karnataka for its first unit of 600 mw at Udupi. Also, inordinate delay in commissioning of the second unit of 600 mw has further worsened cash flows to the company.
"There has been delay in payment on outstanding of 90 crore as we have receivables due with the state discoms. We are working closely with the state government so that the issue is resolved and we have cash," a senior executive from Lanco Infratech said.
The company had raised a loan of 4,500 crore for the project from a consortium of 15 banks led by state-run Power Finance Corporation. Although the company did not reveal names of other banks, analysts said that the consortium included Bank of Baroda, Dena Bank, IFCI, Canara Bank, Bank of India, Indian Overseas Bank, Punjab National Bank, Indian Bank and IDBI. They said that ICICI Bank, Axis Bank and Rural Electrification Corporation do not have any exposure to the loan.
"UPCL has paid all installments until now. The non-payment in January is not yet a concerna¦it takes six months to consider it as a non-performing asset," Power Finance Corporation's chairman and managing director Satnam Singh said.
UPCL is in pact to sell power to eight state-run power distribution companies, of which seven are located in Karnataka and one in Punjab. The first unit of 600 mw, which sells power primarily to Karnataka discoms, started operations in 2010. The second unit is ready for commercial operations but is not able to do so as Karnataka Power Transmission Corporation has not been able to complete the transmission line due to delay in clearance from the ministry of environment and forests.
In April 2011, the company's loans were rescheduled due to a delay in commercial operation of the second unit from an earlier schedule of August 30, 2010, to April 30, 2011. It has been further postponed to August 2012.
Earlier this month, CRISIL Ratings downgraded the ratings on the bank facilities of UPCL to 'CRISIL B+/Negative' from 'CRISIL BB+/Negative' and cautioned that the company may not be able to service its debt repayment in January. The rating agency had said that UPCL was seeking an additional loan of 340 crore and was talking to its offtakers for payment to manage cash flow.

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