Jaiprakash says hydropower deal with Reliance Power collapses

Jaiprakash said in a statement that talks with the Anil Dhirubhai Ambani Group fell apart due to a 'difference of commercial aspects'

Jaiprakash Power Ventures, which had been in separate talks with a number of players to sell off its hydro power portfolio, has called off its latest discussions with Anil Ambani-owned Reliance Power. In July, Reliance Power Ltd had agreed to buy the hydropower assets of JP Ventures Ltd, after a consortium led by Abu Dhabi National Energy Co. PJSC (Taqa), called off the Rs 9,689-crore plan to buy two of Jaiprakash’s hydropower plants.

It is learnt that the regulatory uncertainties around tariff issues of JP Power's Karcham Wangtoo plant have hit the Rs 12,000-crore deal with ADAG. Last week, electricity regulator - Central Electricity Regulatory Commission (CERC) had asked JP Power to expedite filing of tariff petition for 1,091 Mw Karcham Wangtoo hydel project. The direction from the CERC came after the utility sought withdrawal of provisional tariff petition related to the plant.

"Due to prevailing regulatory uncertainties and tariff issues, which impact valuations, Reliance Power and Jaiprakash Power Ventures limited (JPVL) have terminated discussions regarding Reliance Power's acquisition of JPVL's Hydro portfolio of 3 projects with an aggregate capacity of 1,791 MWs," stated ADAG release.

According to reports, a show-cause notice will be issued by the Central Electricity Authority (CEA) shortly to JP Power for violating techno-economic clearance (TEC) conditions in the Karcham Wangtoo project. The project is currently running at 1,200 megawatt capacity against the techno-economic clearance, which was given for 1,000 megawatt.

However, JP Power stated that discussion with ADAG had been called off 'for reasons not attributable to any regulatory uncertainities but due to difference of commercial aspects'.

Reliance CleanGen Ltd (RCL), a unit of R-Power, had signed an exclusive accord for the acquisition of the entire hydroelectric power portfolio of Jaiprakash Power. The portfolio comprises three plants—Baspa Stage II (300 Mw) and Karcham Wangtoo (1,091 Mw) in Himachal Pradesh, and Vishnuprayag (400 Mw) in Uttarakhand. Adani Group was also engaged in talks for acquiring JP Power's hydro projects in a deal worth over Rs 11,000 crore.

On Wednesday, shares of Jaiprakash Power fell down by 5.86%, to close at Rs 13.65 on BSE. Reliance Power shares went up by 5.34% to close at Rs 75.9.    

JP Power has a thermal power portfolio of 1,160 Mw, including 500 MW Bina thermal project and 660 MW Nigrie Thermal power project.