The Hindu Business Line : NTPC offers 3 projects for foreign equity participation

Power play
May offload up to 49 per cent in the projects to generate interest among potential foreign investors.
NTPC has been facing problems in arranging gas for its projects and the involvement of investment firms from the Gulf

New Delhi April 27 NTPC Ltd is offering three upcoming projects for foreign equity participation, with minority double-digit stakes on the anvil for these gas-based projects coming up in South India.

NTPC, which is hoping to offer the stake to strategic investors from West Asian countries in lieu of possible gas supply deals, wants to keep the proportion of stake sale flexible in the three projects, which entail a cumulative investment of $3.8 billion. Government sources, however, indicated that the power major could offload up to 49 per cent in the projects to generate interest among potential foreign investors.

The company has invited proposals from one or more investors from West Asia as joint promoters in each of the three projects — the 1,950-MW Kayamkulam gas-based expansion project in Kerala and two coal-based power projects of 1,000 MW capacity each proposed to be set up in Ennore and Cheyyur in Tamil Nadu, an NTPC official said.

Two teams from NTPC had recently concluded a visit to Gulf, including Oman, Saudi Arabia and UAE, where oil firms, high-profile investors and bankers were given presentations on the investment opportunities available in the company's upcoming projects. The proposed project at Kayamkulam is expected to cost $1.48 billion, while the Ennore plant will need an investment of $1.13 billion and the Cheyyur plant slated to cost $1.16 billion. All the projects would be developed on a 70-30 debt-equity ratio, officials said.

In October last year, NTPC had offered Qatar Investment Board up to 40 per cent stake in the Kayamkulam project. The feasibility study for the Kerala project is currently on and is subject to water and fuel tie-up.

NTPC's offer to the foreign players follows the Power Ministry's suggestions to its public sector enterprises to identify projects for attracting investment from West Asia.

NTPC has been facing problems in arranging gas for its projects and the involvement of investment firms from the Gulf region, most of which are state-owned, could help the projects tie-up the fuel in the long run.

NTPC is also looking at the possibility of tying-up fuel for its other gas-based stations, most of which are running below capacity because of fuel shortages.