Lanco Infratech Ltd has entered into two power purchase agreements and restructured financials for three other projects.
The diversified company, which is passing through tough times, expects to achieve an installed capacity of 8,000 MW by 2018 as it sets out to execute some of the projects.
According to T Adibabu, Chief Operating Officer, Finance, Lanco Infratech, “These are significant developments giving clear visibility to the completion of projects costing almost ₹40,000 crore. With the commissioning of these plants, the company will have a consolidated operating power capacity of around 8000 MW by FY18.” Lanco Kondapalli Power Ltd, one of the step-down subsidiaries of Lanco Infratech Ltd, has signed power purchase agreements aggregating to 1108 MW with distribution companies in Telangana and Andhra Pradesh. The company has secured gas under the pooling mechanism for October 1, 2015 to March 31, 2016.
The company’s subsidiary, Lanco Amarkantak Power Ltd, has got a favourable order from the Supreme Court directing South Eastern Coalfields Ltd to supply coal to the 300-MW Lanco Amarkantak unit II treating it as a unit having a subsisting long-term power purchase agreement. The Amarkantak project has executed the documentation for flexible refinancing with its lenders for 2 x 300 MW Unit 1 & 2 and also completed the documentation for financial closure of its 2 x 660 MW expansion project, whose costs have escalated.
Financial closure Similarly, three of the other step-down subsidiaries with power projects under construction also completed the documentation for financial closure, after considering their cost overrun. The subsidiaries are the coal-based Babandh and Vidarbha power projects, each of 1320 MW capacity, and the 76-MW Mandakini hydro power project. The consortium of lenders to the 500-MW Teesta Hydro power project had decided to convert part of its loans into equity under the Strategic Debt Restructuring mechanism as an interim measure pending the induction of a strategic investor into the project.
In addition, the company has an EPC order book of ₹28,158 crore. With the financial closure of these projects, the company would be able to execute majority of its order book within the next two years.