Financial Briefs: India and overseas

India and overseas

NTPC signs MoU to acquire three power projects in Bihar

NTPC Limited has signed an MoU with the Bihar government and the state’s power utilities to acquire stakes in three power projects. The agreement has been signed for the acquisition of the 720 MW Barauni Thermal Power Station. In addition, NTPC will acquire Bihar State Power Generation Company Limited’s (BSPGCL) 27.36 per cent and 50 per cent stake in Kanti Bijlee Utpadan Nigam Limited (KBUNL) and Nabinagar Power Generating Company Private Limited (NPGC) respectively. While KBUN owns the 610 MW Muzaffarpur thermal power station, NPGC is developing the 1,980 MW Nabinagar super thermal power project in Aurangabad district of Bihar. NPGC is a 50:50 joint venture (JV) between NTPC and BSPGCL, and KBUN is a subsidiary of NTPC. Post the transaction, BTPS will become a part of NTPC’s portfolio, and KBUNL and NPGC will become wholly owned subsidiaries of NTPC.

HNPCL acquires Kiran Energy Solar

Hinduja National Power Corporation Limited (HNPCL) has acquired Mumbai-based Kiran Energy Solar Power for an all-cash deal valued at Rs 10 billion. The deal was facilitated by the YES Securities Sustainable Investment Banking team, the sole adviser to the transaction, and has led to the acquisition of 85 MW of operational capacity by Hinduja Power. Kiran Energy is also engaged in building solar clusters in Gujarat, Maharashtra, Karnataka, Tamil Nadu and Rajasthan, with capacities ranging from 50 MW to 100 MW. With this transaction, the three private equity players, Argonaut Ventures, New Silk Route and Bessemer Venture Partners India, holding 80 per cent stake in Kiran Energy, will exit the company.

RPower sells Tilaiya UMPP to JUVNL

Reliance Power Limited (RPower) has sold its 3,960 MW Tilaiya ultra-mega power project (UMPP) for Rs 1.12 billion to the state-run Jharkhand Urja Vikas Nigam Limited (JUVNL). The company has divested its entire stake in Jharkhand Integrated Power Limited (JIPL), a special purpose vehicle created for the development of the Tilaiya UMPP. The UMPP was won by RPower in 2009 at a tariff of Rs 1.77 per unit. Earlier, in 2015, JIPL had terminated the 25-year power purchase agreement for the plant, which was signed with 18 off-takers in 10 states due to land acquisition issues. RPower had planned a capital expenditure of Rs 360 billion for the project and had a coal linkage with the Kerandari coal block in the North Karanpura coal fields of Jharkhand.

L&T sells its electrical and automation business to Schneider Electric

Larsen & Toubro (L&T) has signed a definitive agreement with Schneider Electric for the sale of L&T’s electrical and automation business in India for an all-cash consideration of Rs 140 billion. Schneider Electric has formed a consortium with Singapore’s state investment firm Temasek Holdings for the proposed deal. Both the parties of the consortium will infuse fresh investment in the subsidiary and after the completion of the deal, Schneider Electric will hold 65 per cent stake in the company while the remaining will be held by Temasek.

Tata Power plans to invest $5 billion to boost its renewable energy capacity

Tata Power Company Limited is planning to invest around $5 billion to augment its renewable energy capacity to 12,000 MW by 2028. As per the company’s estimation, the expansion plan will require an investment of $594,000 per MW. Currently, the share of renewable energy in the total power portfolio stands at 30 per cent. Tata Power aims to increase the share of non-fossil fuels to 50 per cent by 2025.

EBRD, CTF and ADB to jointly finance a 50 MWp solar plant (Kazakhstan)

The European Investment Bank (EBRD), the Clean Technology Fund (CTF) and the Asian Development Bank (ADB) will provide joint funding of $52.4 million to the 50 MWp Baikonur solar plant in Kazakhstan. The financing package will include two senior secured loans of up to $30 million from the EBRD and up to $10.4 million from CTF. Meanwhile, ADB will extend funds of up to $12 million, which will be earmarked for the development, construction and operation of the plant. Once operational, the solar plant will help mitigate 75,000 tonnes of carbon dioxide emissions annually.

World Bank approves $180 loan guarantee to KenGen (Kenya)

The World Bank has approved a loan guarantee of $180 million for the Kenya Electricity Generation Company (KenGen) to help strengthen the financial position of the state-run company. The assistance is being provided under the World Bank’s International Development Association programme. It will help in long-term commercial financing of up to $300 million to refinance the company’s existing loans, enhance its credit quality and promote renewable energy development in the country.

China’s CJEH forays into the WtE industry in Brazil (China)

China Jinjiang Environment Holding Company Limited (CJEH) has agreed to subscribe for a majority stake in  Brazilian waste-to-energy (WtE) company Foxx URE-BA Ambiental Ltda. CJEH will subscribe to over 40 million shares in the Brazil-based company for an aggregate cash consideration of nearly $15 million, which represents a 51 per cent stake in the company. Foxx URE-BA will build and operate the country’s first WtE project in Sao Paulo, with a planned waste treatment capacity of 825 tonnes per day. This marks CJEH’s foray into the WTE industry in Brazil and Latin America.