|NTPC CMD AR Choudhury|
AT A time when many parts of the country are reeling under severe power shortages due to scant supply of coal, NTPC is assessing a proposal to acquire power assets worth $5 billion, or Rs 31,000 crore.
It is in sharp contrast to earlier strategy of taking the greenfield route to add capacity. The country's largest power developer...has received responses from 34 private sector power plants across the country and has shortlisted eight of them so far for acquisitions.
"We have mandated KPMG to look at their fuel supply linkages, power purchase agreements, land acquisition, environment clearances and list those eight plants in terms of profitability," NTPC chairman Arup Roy Choudhury told a leading national dailies naming the potential sellers.
The company is willing to invest up to Rs 10,000 crore for 30 percent equity in these projects. The rest will be funded by debt.
India's largest power producer's inorganic plans come after power minister Piyush Goyal asked NTPC to explore possibilities of buying stranded power plants instead of setting up 11,000 MW of greenfield assets on its own. This is to ensure that national assets in the sector are use to the maximum. Besides, the inorganic route will help the power major to save on land acquisition costs and time on various regulatory clearances.
These acquisitions are likely to be completed by end of this fiscal and NTPC will add another 1,800 MW of greenfield capacity by then.
NTPC, with an installed capacity of 43,128 MW is presently contributing about one fourth of the country’s entire power generation and plans to become a 1,28,000 MW power company by 2032.
NTPC plans to add 14,038 MW during the 12th Plan period (2012-17).
It added 1,835 MW to its portfolio last fiscal and plans to add 2,023 MW in 2014-15 and the Maharatna PSU has cash reserves of Rs.16,867.7 crore as on 31 March this year.