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Clenergen to set up biomass power plant

T E Narasimhan  |  Chennai 

(CRGE), a US-based company, is planning to invest around $100 million (around Rs 460 crore) in setting up biomass-based power plants in southern states of India. The company said it was planning to list its 100 per cent Indian subsidiary on the Bombay Stock Exchange to support the company's

Speaking to Business Standard, Tim Bowen, chief operating officer, Clenergen Corporation, said the company had already secured a 15-year power purchase agreement (PPA) with the Power Trading Corporation (PTC), which includes the electricity generated from the

“We are planning to generate around 71 Mw of power, initially, using bio-mass,” he said, adding that the company had done fours year of research on feed stock in India, after which it identified three special plants, two trees and bamboo, which can reduce the feedstock costs by 50 per cent.

“India is an important market and it offers huge potential for the company,” said Bowen.

The company will focus mainly on south India, especially Tamil Nadu, due to its geographical advantage. “It is better to be close to the equator,” he said.  

The company is looking at both organic and inorganic growth in India. Recently, the company has acquired 1.5 Mw located near Salem in Tamil Nadu.

The purchase price of approximately $1.65 million (based on current exchange rates) was funded through financing provided by the Indian Agency.

“We are also in the final negotiation of acquiring a 18 MW  plant,” said Bowen. In India, the company is planning to buy, build and operate bio-mass based power plants, using its own specialised feed stocks and supply electricity under a long-term PPA atUS cents 14 per Kwh, he added.

The reasons for taking the inorganic route, according to Bowen, are its ability to attract investors as an emerging company and the time it takes for setting up greenfield facilities. Both these concerns could be addressed through acquistions, he said.

The company also said it would promote power plants on leased lands, through joint venture even with state-run agencies.

Commenting on the subsidiary company, Clenergen India Pvt Ltd, Bowen said, the company would be listed on the Bombay Stock Exchange in March 2011 and was planning to raise $31 million (around Rs 142.6 crore) to support a 32 Mw project which will come in 5,000 acres of land at Tuticorin, Tamil Nadu.

The Indian subsidiary is also planning to raise $67 million (around Rs 308.2 crore) by way of debt.

The company had signed a 49-year lease agreement with Jeer Mutt Religious Institution for cultivation of its two species of tree and grass for the supply of fuel (wood chips) for the proposed plant at Tuticorin.

First Published: Mon, June 21 2010. 00:52 IST