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Sajjan Jindal-led JSW Energy is keen on putting money into hydro energy, both through acquiring stressed hydro assets as well as bringing its Kutehr hydro power project back on track despite India’s hydro power space scenario not looking optimistic.
JSW Energy’s greenfield hydel project, 240 MW Kutehr plant in Himachal Pradesh has been stalled since 2011 with only around 10 per cent of the project completed by now at the investment of Rs 250- 300 crore.
According to Sharad Mahendra, COO, Energy Business, JSW Energy, the company is ready to invest another Rs 2,500 crore into completing the project once it receives a positive response on the long-term power purchase agreement (PPA) from Haryana government. The company has submitted its bid for 240 MW out of 500 MW auctioned by this state.
“We are ready to commission the moment there is a clarity on PPA,” Mahendra said. “The lenders are also not looking towards the power sector in a positive way in terms of lending so it will not be easy to get the funding without long-term PPAs. We are waiting for the PPA to happen which we are quite hopeful,” he added.
Mahendra also said that company is looking at various opportunities as the sector is going through stress. “There are various hydro assets available,” Mahendra said adding the level of completion of the projects as well as PPA tie-ups would be the main criteria for the company to consider any assets for potential acquisitions.
Stalled projects
JSW Energy has ventured into the hydro generation in 2015 after it has acquired 300 MW Baspa-II and 1,080 MW Karchham Wangtoo projects in Himachal Pradesh from debt-ridden Jaiprakash Power Ventures Ltd (JPVL), a part of Jaypee Group which is currently undergoing the insolvency proceedings.
The entire capacity of company’s two existing hydro projects are completely tied up with long-term PPA with Haryana, Rajasthan, UP and Punjab governments at an average tariff of Rs 4.39 paise while 12 per cent of the total generation is supplied to the Himachal Pradesh government for free.
While Karchham and Baspa plants account for 30 per cent of JSW Energy’s 4,521 MW generation portfolio, they also account for nearly half of the total privately-owned hydel capacity in the country. Till date, only 3200 MW has been commissioned through the private route which is just 7 per cent of the total installed hydropower capacity of around 45 000 MW, according to PWC-Assocham joint study on hydro sector.
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