)
Jindal Steel and Power (JSPL) is known to be in talks to purchase a 1,320-megawatt coal-based power plant at Nellore, Andhra Pradesh, that belongs to Hyderabad-based Kineta Power.
While the value of the deal is not known, sources said the cost of setting up the power plant is Rs 5,000 crore. The project, which is currently under implementation, has already received forest and defence clearance.
The project is promoted by Bangalore-based Kineta Mines and Minerals and owned by V Balashowry, who is the chairman and managing director of Kineta Power. The group is primarily engaged in export of iron ore and are also the suppliers of burnt lime, limestone and dolomite.
In response to a questionnaire, a spokesperson of Jindal Power said: “We evaluate potential options for inorganic growth through acquisitions on a continuous basis. As a matter of policy, we would not like to comment on a specific case.”
Phone calls to Kineta’s corporate office in Hyderabad went unanswered.
The imported coal-based power project is one of the many that are coming up near Krishnapatnam Port in Nellore district. A number of companies are setting up power projects in the area including Reliance Power, Gayatri Energy Ventures and Nagarjuna Construction Company (NCC). Earlier this year, Singapore utility Sembcorp was in talks to buy NCC’s power plant.
<B>Demand higher in South</B><BR>
JSPL already operates a 1,000-Mw coal-based power plant, commissioned in 2007, at Tamnar in Chhattisgarh. The company plans to expand the capacity of this plant by 2,400 Mw. Tamnar-II is expected to commission its first unit of 600 Mw in the current calendar year. Two units are expected to be commissioned by March 2014. The company has already signed a power purchase agreement with the Tamil Nadu government to sell 400 Mw.
While the firm has already been transmitting power to the south, purchase of this Nellore power plant can extend its footprint in the area. The power-deficit southern sector is expected to have better demand for power than in western and central India.
Jindal Power has also signed a memorandum of understanding with the government of Jharkhand to set up a 2,640-Mw coal-based power plant. It also has plans to expand its presence in the hydro power sector - it has already signed agreements to build 6,100-Mw capacity in Arunachal Pradesh.
In the past year, many companies, such as Lanco Infratech, have been trying to sell their power projects.
On the other hand, some companies like JSW Energy and state-owned National Thermal Power Corporation have said they would like to buy into power projects if they find them viable.
