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Monday, April 23, 2012

China Light and Power arm to raise debt

CLP India, a subsidiary of Hong Kong-based China Light and Power, is planning to raise about Rs 1,000 crore in debt in 2012-13.

The debt would be used to fuel its plans to add wind power capacity across the country. CLP India has about 500 Mw of wind power generating capacity and is also constructing another 267 Mw. “We have been adding 200-300 Mw of wind power every year. If this rate continues, we can reach 2,000 Mw,” said managing director Rajiv Ranjan Mishra.

The company recently won a 102.4-Mw wind power project in Rajasthan. It is one of the few large international power companies operating in India. It also has interests in non-renewable sector and has 655 Mw capacity in gas-based generation. It is building a 1,320Mw coal-based power plant in Jhajjar, Haryana. One of the units of this power plant of 660 Mw has already been commissioned.
The company recently completed 10 years of operations in India, and had entered the country at a time when foreign investors were facing losses like Enron in Dabhol, Maharashtra. “Back then, outstanding payments were endemic. So, we focused on getting them back and by 2005, our outstandings were liquidated,” said Mishra.

At present, the company is in a similar fix as it has outstanding payments from the Tamil Nadu state utility since the past 12 months. However, Mishra says things look better now. “They have had a tariff increase and we hope that the bills are cleared soon,” he said.

Unlike the last time, the company is not shy of making large investments this time. It is even hoping to bid for the ultra-mega power project in Chhattisgarh. The 4,000-Mw power project comes with a coal mine at the pit-head, eliminating fuel risk for the project. It is these kinds of projects that CLP India is looking for. “We would take land acquisition and development risks, but when we make this kind of large investments we should have the ability to pass on fuel supply risks,” said Mishra. The much delayed project could come to bid around the end of the year.

As the sector is going through tough times like high interest rates, Mishra expects the bids to be rational now.

In the past, tariffs for UMPPs have been very low and very competitive.

“We definitely expect rational bids though the competition might be high this time around as well,” said Mishra.

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