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| 'We are working on 4,622 Mw...identified another 14,000 Mw' |
| PB Jayakumar / Mumbai Jul 22, 2009, 01:04 IST |
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State-run NHPC Ltd is close to bringing out an initial public offer (IPO) next month. It manages 14 per cent of India's hydel power generation, with an installed capacity of 5,175 Mw at 13 power stations and with generation of 17,000 million units of power in a year. They are presently working on projects with a total capacity of 5,000 Mw. In an exclusive interview with PB Jayakumar, its chairman and managing director, S K Garg details NHPC’s plans:
How much of funds are you planning to raise from the IPO?
We hope to finalise it within a few weeks, to roll out the public offer next month. We are working on 11 hydel projects totalling 4,622 Mw. In the XIth plan period, we require Rs 21,600 crore to finish these projects and loans have been tied up for Rs 16,000 crore. Life Insurance Corporation will give Rs 9,000 crore and Power Finance Corporation will offer a loan of Rs 4,000 crore. The rest of the funds will be raised through internal accruals and from the offer. We plan to raise Rs 4,500 crore from internal accruals and the balance Rs 500 crore will be used from the IPO proceeds. The rest of the unutilised funds from the IPO will be used for the new projects in the XIIth plan period.
When compared to other power projects, hydel power projects require more time for commissioning due to various reasons. How far has this has affected your plans?
Normally, a hydel power project can be commissioned in 4-5 years from zero date, at an investment of Rs 5.5-6 crore per Mw. It should be noted that power projects are coming up in inaccessible terrains, forests and hills. Our raw material is available only there. It is a challenging task to finish projects in these geographical areas and there are issues such as timely clearances and land acquisition. Still, most of our projects are on target, except a couple of projects which were delayed by 1-2 years.
Land acquisition is a major issue for most project developers. Are you facing trouble on this front?
As part of the Hydropower Policy in 2007, the Government has set guidelines for Resettlement and Rehabilitation (R&R). We are offering a compensation and relief package over and above the guidelines, which include medical help, education and employment opportunities to the project-affected people, as per a Board decision taken during February 2008. Except for two projects in Madhya Pradesh, so far we have not faced much local opposition against execution of our projects.
While many other public sector players are teaming with the private sector for power generation and transmission, why is NHPC not doing so?
We are open for private sector collaboration and will definitely co-operate with suitable proposals. India's target is to increase the share of hydropower generation from the current 25 per cent to 40 per cent in the near future. So far, we have harnessed only one-fourth of our hydro potential. In this scenario, private sector participation is also important. We do not see them as competitors, since we have expertise in this field for 34 years and can offer our experience and technology for projects. In fact, we have signed an MoU with states such as Manipur, Madhya Pradesh and Jammu and Kashmir for setting up joint venture projects. With the Manipur Government, we will set up a 66 Mw project, in which NHPC will have 74 per cent stake. A fortnight ago, we have finalised for another 1,500 Mw, in which NHPC will have 69 per cent share holding and 26 per cent with the state. With the J&K Government, our MoU is to set up JV projects with 49 per cent each for NHPC and the state Government and the remaining 2 per ent with Power Finance Corporation.
What are your plans for the 12th plan period and beyond?
So far we have identified 16 projects of 14,000 Mw of capacity in states such as Arunanchal Pradesh, Uttarakhand, Jammu and Kashmir, Sikkim and Manipur. Funding for these projects will not be an issue, as we have high creditworthiness with lenders. We also have very good internal accrual options, as more and more new projects are getting commissioned, year and after year. If more funds are required, we may go for a follow-on IPO or there are other options.
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