JSW Energy to raise Rs 13,500-crore debt

Sajjan Jindal-led JSW Energy, which went public last year, is planning to raise Rs 13,500 crore in debt this year. The loan will finance two coal-based power projects under development.

The company is developing a 1,600-Mw project in West Bengal, with a project cost of Rs 11,000 crore and a 1,320-Mw one in Chhattisgarh with a project cost of Rs 7,000 crore. “These projects will have a debt equity ratio of 75:25 and we will start the fund raising process in the third quarter of the current financial year,” said Pramod Menon, Chief Financial Officer.

The consolidated debt of the company is Rs 8,300 crore and has a debt to equity ratio of 1:1.6. “We intend to maintain the debt to equity ratio or keep it below 1:2,” said Menon.

JSW is also in the process of developing the 240-Mw Kutehr hydro power project in Himachal Pradesh, with a project cost of Rs 2,000 crore. It already has 995 Mw capacity and plans to added another 2,145 Mw by the end of 2010-11, a 215 per cent increase. Two projects in the construction stage, at Ratnagiri in Maharashtra and Barmer in Rajasthan, will be commissioned this year.

In addition, the company plans to bid for both the ultra mega power projects (UMPPs) in Chhattisgarh and Orissa, which might seek bids this year. These coal-based power projects have a capacity of 4,000 Mw each. “UMPPs are typically low margin businesses and tend to give fixed returns. The government arranges for approvals and land in these projects. We will bid for these projects and might even look at joint ventures for these bids,” said Sajjan Jindal, Chairman, talking to reporters at the company’s first annual general meeting.