India’s state-run Neyveli Lignite Corp. (NLC) Limited is to acquire the 1,320-MW Ragunathpur coal-fired power project, a stressed asset, from the Damodar Valley Corporation (DVC).
Indian Power Minister Piyush Goyal told parliament last week as well as the Raghunathpur project, NLC had “shortlisted two suitable stressed power assets for possible acquisition to augment its power generation capacity.”
The minister refused to disclose the names of the two short-listed companies.
NLC has entered into a memorandum of understanding (MoU) with DVC to acquire a majority stake in the Raghunathpur project, comprising two 660-MW units each, in Purlia district of West Bengal state.
DVC chairman Andrew W K Langstieh earlier stated that his company could divest up to 76% in the Raghunathpur power project to NLC.
SBI Capital Markets is doing the financial and technical due diligence for the sale of equity.
Cash-strapped DVC is scouting for buyers to reduce its debt burden of 400 billion rupees (US$ billion).
The Raghunathpur project currently supplies the generated power to state utilise in Punjab, Haryana, Karanataka and Kerala States under the separate power purchase agreements.
In addition, NLC is considering acquiring two stressed coal-fired TPPs in eastern India.
NLC managing director Sarat Acharya confirmed that it was in talks with GMR Group and Ind-Barath Power Infra Limited (IBPIL) to acquire a 1,370-MW (2x685) project at Raikheda in Chhattisgarh State and a 700-MW (2x350) project at Kharsuguda in Odisha State.
In August, the state-run company invited expressions of interest from the companies willing to sell coal and lignite-based power plants with more than 200 MW of capacity.
NLC is looking to acquire generating projects as part of a plan to increase the company’s portfolio to 21,000 MW by 2025 from the current level of 3,300 MW.
It operates four TPPs at Neyveli in Tamil Nadu State one at Bikaneer in Rajasthan State.
The federal power ministry has advised state-run power utilities, such as NLC and NTPC Limited, to look at the prospects of buying stranded power assets rather than developing greenfield projects.