India's KSK Energy Plans Power Projects Totaling 9,000 Megawatts by 2013

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Researched by Industrial Info Resources (Sugar Land, Texas)--KSK Energy Ventures Limited (Hyderabad, Andhra Pradesh), a wholly owned subsidiary of power development and investment firm KSK Power Ventur PLC (LSE:KSK) (Douglas, Isle of Man), has announced plans for power projects totaling 9,000 megawatts (MW) over the next five years. Of these, VS Lignite, a 135-MW lignite-based power plant in Rajasthan, will be commissioned by December 2008, and Wardha, a 540-MW thermal power unit at Warora near Nagpur in Maharashtra, will go on stream by December 2009. The company is scouting for coal blocks in the country. It has already established coal linkages of 1.1 billion tons. There is currently no report of overseas acquisitions of coal blocks by KSK Energy.

The company currently has a power-generation capacity of 144 MW from its operational plants. It is in the process of developing or planning projects for 8,993 MW of power, which will be sold to state-owned and industrial consumers under a combination of short-term, midterm and long-term power-purchase agreements. The major expansion initiative is expected to cost $8.73 billion.

Projects under development include a 43-MW expansion of a plant in Arasmeta, Chhattisgarh, that is likely to be commissioned in 2011, a 1,800-MW coal-based power unit in Chhattisgarh that is slated for completion in 2012 and a 130-MW hydroelectric project in Arunachal Pradesh that is expected to be commissioned in 2011. KSK Energy plans to set up JR Power, a 1,800-MW coal-fed power plant, in Orissa and Kameng Dam, a 600-MW hydroelectric plant, in Arunachal Pradesh, both of which are scheduled to go on stream in 2012. Other projects that are being planned for completion in 2013 include KSK Narmada, a 1,800-MW coal-fed power unit in Chhattisgarh and Wardha Naini, a similar undertaking in Orissa. The company also plans to develop the Kameng Basin project, a group of seven hydroelectric power plants in Arunachal Pradesh, with a combined generating capacity of 345 MW. This project is also slated for commissioning in 2013.

KSK Energy entered the capital market on June 23 to raise funds for the upcoming $400 million 1,800-MW thermal power plant at Wardha, Chhattisgarh. The company plans to raise $300 million from its initial public offering (IPO) and procure the balance from internal accruals. It has already raised about $100 million through a pre-IPO offering of which it plans to use $54 million for the Chhattisgarh project. Axis Bank Limited (BOM:532215) (Mumbai), GE Capital International Services (Gurgaon, Haryana), Infrastructure Development Finance Company (BOM:532659) (Chennai, Tamil Nadu), Macquarie Bank (Sydney, Australia), Tree Line Asia Master Fund (Hong Kong) and Universities Superannuation Scheme (UK) were among the investors who participated in the pre-IPO placement process.

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