NTPC has invited expressions of interest (EoIs) for acquiring coal-based thermal power plants, from state electricity boards, independent power producers (IPP), power plant developers and captive power producers.
The plants could be in any stage … either operational or synchronised or even under planning or construction stage. They could be based on domestic or imported coal or a mix of the two. However, the projects would have to have requisite land, and firm fuel and water linkages, statutory clearances and power purchase agreements in place.
NTPC Chairman Arup Roy Chowdhury had already made known the company’s plans of taking the inorganic route to growth. The company is said to be evaluating some seven stranded power plants with an eye on a buy-out, although a status update on this was not available. He has given indications that money was not constrain if the due diligence threw up good options.
It at present has an installed capacity of 42,464 MW through 22 coal-based and eight gas-based projects with capacity addition plans of 20,000 MW under implementation.
However, like all players in this field, NTPC is stuck in the travails of setting up Greenfield projects, which have become time-consuming and frustrating. A case in point may be the Katwa project that NTPC is trying to erect in West Bengal since mid-2011. The 1,320 MW project is mired in land tangles, in a state which stands firm on its hand-off policy on land acquisition.
The ‘buy-out’ route proved handy for the Kolkata-based RP-Sanjiv Goenka group, which marked its foray outside West Bengal by buying the Dhariwal power project in Maharashtra which was caught in a limbo due to funds shortage. Banks too have been trying to broker deals to shed their own NPA in power sector where projects have got stuck due to funds shortage, turning loan assets substandard.
Power plant acquisition is not new for NTPC, which has turned around acquired properties such as Badarpur near Delhi which it bought in 2006, Unchahar (bought from the UPSEB in 1992), Talcher (from erstwhile OSEB) in 1995 and Tanda. NTPC said that from the viewpoint of capital requirements, turning around old units was a low cost, high return option.
