Energy majors including Tata Power, Reliance ADA's Reliance Power and Sterlite Industries have shown interest for equity partnership of 49 per cent in the state-run GSPC Pipavav Power Company Ltd (GPPC), sources in the know informed.
A subsidiary of Gujarat State Petroleum Corporation (GSPC), GPPC expects to raise around Rs 450 crore through equity partnership from private players, the company officials informed. Last month, GPPC had invited expressions of interest (EOI) from global companies for sale of minority stake to an extent of 49 per cent in the company.
"As many as 12 companies have submitted their EOIs for equity partnership. Two of them are foreign investor companies, while the rest are Indian companies having interest in energy sector. Tata Power, Reliance Anil Dhirubhai Ambani Group's Reliance Power and Sterlite Industries are among the big players, who have submitted EOIs for the equity partnership," said a source close to the development.
A subsidiary of Hong Kong-based CLP Group, CLP India is also in the race to acquire stake in the power company.
Owing to the lukewarm response received from the interested companies in the initial stage, GPPC decided to extend the deadline to submit the EOIs by a week to October 1, 2012. "Over 50 per cent of the EOIs that we got, were received in the extended period," said a source. However, the source informed that Gujarat-based power majors, Adani Power and Torrent Power have not submitted EOIs.
"Now, the management will scrutinise the EOIs and ask qualifying companies to submit their bids for the partnership. It is quite possible that all the companies may be asked to submit their bids," the source mentioned.
GPPC has appointed SBI Capital Markets as financial advisor for soliciting equity participation in the company, which is a special purpose vehicle (SPV) set up by GSPC along with Gujarat Power Corporation Ltd (GPCL) to set up a power project catering to energy requirements in Gujarat.
As per the proposed shareholding of the company, GSPC will hold about 34 per cent stake, while GPCL will hold 17 per cent, while 49 per cent will be given to private investors.
GPPC is setting up 702 megawatt (Mw) (2 x 351 Mw) gas-based power project at Kovaya village, District Amreli in Gujarat with an estimated investment of Rs 2900 crore with debt:equity ration of 80:20.
It has already signed the long term power purchase agreement (PPA) for a period of 20 years with the state power utility, Gujarat Urja Vikas Nigam Limited (GUVNL).
Also, the company has entered into a gas supply agreement (GSA) with GSPC for supply of around 3.2 million standard cubic meter per day (MMSCMD) of gas.
The entire power project is expected to be commissioned by June 2013, while the first unit of 351 Mw is expected to be commissioned by December 2012. So far, over 90 per cent of the physical work has been completed. The plant capacity can be scaled up to 1050 Mw.
GPPC also has set up a 5-Mw solar PV power plant at Gujarat Solar Park at Charanka Village in north Gujarat at the cost of Rs 64.41 crore.
