GMR Energy, the flagship energy wing of GMR Infrastructure, is likely to add around 800 Mw this fiscal and expects to add around 4,000 Mw of coal-based power in the next three years. This energy vertical, which is in search of coal assets abroad, sees the recent decision of the Environment Ministry to allow coal mining in some no-go areas as a positive development and is hopeful of a pragmatic solution in the future. Raaj Kumar, chief executive officer of GMR Energy spoke to Debasis Mohapatra about the future of the power industry in general and GMR in particular.
What is the capacity addition you are planning this fiscal?
Around 800 Mw is likely to be added of which 25 Mw will be solar and the rest will come from the two gas power machines. On the coal front, capacity addition will happen in subsequent years.
Why will there be no addition of coal-based power this fiscal?
Two of our coal-based projects are scheduled to be commissioned in the first quarter of 2012-13. No project is behind schedule as of now. We expect that around 4,000 Mw of coal-based power will be added to the present capacity in the next three years.
What are your plans for the solar energy segment?
Presently, we are executing a 25 Mw plant in Gujarat. We would like to do some more projects in Gujarat and Rajasthan as and when opportunities come by.
Have you achieved financial closure of your Madhya Pradesh thermal power plant?
Our Madhya Pradesh project has not achieved financial closure yet. It will take some time as coal linkage to this 1,400 Mw power plant is yet to be provided after which we will work on financial closure.
There is a bit of good news from the environment ministry with respect to coal linkage in the recent times. How do you view the situation from the perspective of future investments?
We have heard some positive news in respect of some of the coal blocks being shifted from ‘No-Go’ to ‘Go’ area. We believe that more pragmatic solutions will be found and investments in power sectors which have slowed down a bit in the recent past will regain momentum.
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The Cost of funding has risen in the recent times and there is an overall inflationary environment. Will it impact your operating margins in the near future?
Interest rates are higher which have pushed the cost of funds for the company and this is definitely a matter of concern for us.
Any updates on the overseas asset acquisition...
That’s a continuous process. Every power company in India is now looking for acquisition of coal assets. So are we. We had earlier acquired coal mines in South Africa and Indonesia and will look for some more.
There is a kind of ‘resource nationalism’ seen in some resource-rich nations. Is it a matter of concern for power companies in India who are actively looking for coal resources?
Resource nationalism is nothing but natural. But at the same time, each country with natural resources realises that development of their resources depends on foreign investment in a globalised economy. So, we are not too concerned about the phenomenon called “resource nationalism”.