Monthly Archives: September 2011

PFC awaits govt approval for Rs 5,000 crore tax-free bonds issue

 Power Finance Corporation (PFC) is awaiting government approval to raise Rs 5,000 crore through an issue of tax-free bonds to meet funding requirements of the power sector. 

A leading lender for the power sector, PFC, expects to raise as much as Rs 30,000 crore this financial year(2011-12). PFC has raised around Rs 13,000 crore rupee loans so far this fiscal. 

However, the Finance Ministry is believed to have reservations about allowing PFC and Rural Electrification Corporation (REC) to raise money through tax-free bonds. 

“We are waiting for the notification (approving Rs 5,000 crore tax-free bonds issue) from the Finance Ministry. We expect to raise this amount in the current fiscal,” a top PFC official told PTI. 

The Parliamentary Standing Committee on Energyhad recommended that the Finance Ministry should allow REC and PFC to issue tax-free bonds for raising funds. 

Going by the Finance Ministry estimates, there is a revenue loss of about Rs 24 crore annually for every Rs 1,000 crore of tax-free bonds issue. 

According to the panel’s recent report, the Department of Revenue continues to maintain that “fiscal investments should not be used as an instrument to increase project viability and is repetitive in giving reasons for discouraging tax-free bonds as a matter of policy”. 

In correspondence with the panel in November last year, Finance Ministry had said the considered opinion “has been that the fiscal instruments should not be used as an instrument to increase project viability…” while listing out reasons for discouraging tax-free bonds. 

“The issuance of tax free bonds by different governmental agencies tends to crowd out the private sector’s requirement for long term funds… Tax-free bonds tend to distort the actual market determined rates of interest and lead to competing demands for issue of such bonds by other entities as well,” the Ministry said in its correspondence. 

Meanwhile, PFC is also looking at raising about Rs 6,900 crore through issue of long-term infrastructure bonds in the current fiscal. 

The company has just completed a domestic issue of long term bonds worth Rs 2,000 crore. The issue, which was open from September 14-16, saw good response from investors, according to another company official.

Source – Economic Times

Quake disrupts power supply in northern Bengal

Kolkata: Power supply was disrupted in parts of northern West Bengal after the quake epicentred near the Nepal-Sikkim border struck the region on Sunday evening, Chief Minister Mamata Banerjee said, adding damage, if any, was being ascertained.

“As per initial reports, in areas near Sikkim like Kalimpong of Darjeeling district, and adjoining Jalpaiguri and Cooch Behar districts, power supply has been disrupted,” Banerjee said.

However, there were no reports of any casualties so far, the chief minister said, adding Sikkim bore the brunt of the quake.

The Darjeeling district magistrate has been asked to go to the spot to see the situation first hand, she said, adding she could not contact officials of Jalpaiguri district yet.

“Some houses may have developed cracks in the hills, but we are still awaiting confirmation. We are constantly monitoring the situation. If anybody is trapped, then we should all work together to rescue such people. We will help each other,” she said.

The chief minister said an emergency helpline (03322145486) has been started at the director general of police’s control room at the state secretariat, Writers’ Buildings, in Kolkata.

“But there is nothing to panic. The administration is on high alert,” she said.

All districts have been asked to start emergency helplines, she said.

Local reports said a crack developed in the police housing complex at Ultadanga in north Kolkata, but the chief minister did not confirm.

Source – IBN LIVE

BGR bags Rs.3,600 cr NTPC contract

BGR Energy Systems emerged as the lowest bidder for supplying for all nine units of 800 MW steam turbine generator systems to National Thermal Power Corporation (NTPC), according to B. G. Raghupathy, Chairman and Managing Director.

Addressing presspersons here on Friday, he said NTPC had invited bids for 9 x 800 MW super-critical steam turbine generator units for Lara Super Thermal Power Project (2 x 800 MW); Darlipali Super Thermal Power Project Stage – I (2 x 800 MW); Gajmara Super Thermal Power Project Stage – I (2 x 800 MW); and Kudgi Super Thermal Power Project Stage – I (3 x 800 MW).

As per tender conditions, NTPC would award 5/4 units of super-critical steam turbines to the L-1 bidder, that is, BGR Energy. The value for the five units of super-critical steam turbines by BGR Energy was estimated to be Rs.3,600 crore. Last year, the company entered into a strategic alliance with Hitachi for manufacturing super critical steam turbine and generators and steam generators and consummated two joint ventures, BGR Turbines and BGR Boilers. The facilities, being set up near Madurantakam in Tamil Nadu with an investment of Rs.4,400 crore, would be a global manufacturing centre for Hitachi, Japan.

The company would commence construction by January 2012 and commence production in stages from January 2013.

The super-critical steam turbines for NTPC contract would be supplied from a mix of imports from Hitachi, Japan, and components manufactured by the joint venture company, BGR Turbines, and systems by BGR Energy. Mr. Raghupathy said the commissioning of the first turbine would be in 42 months and the next turbine would be two months thereafter for the particular project.

Source – Business Line

Hancock assets buy to secure coal supply for India projects: GVK

GVK Energy Ltd, a subsidiary of GVK Power and Infrastructure Ltd, sees the buyout of coal and infrastructure assets of Hancock Group helping the company secure supplies for its thermal projects under way in India. It will also pave the way for entering into agreements for supply to third parties in Asia, according to the company.

Hancock’s assets, including related infrastructure, has an estimated 7.9 billion tonnes compliant with Australia’s Joint Ore Reserves Committee categorisation.

According to the company statement, this strategic initiative will enable the Hyderabad-based company meet the energy requirements to fuel some of its projects with an option to enter into long-term coal supply contracts for purchase of up to 20 million tonnes a year, useful for about 7,500 MW of power generation capacity.

Mr G.V.K. Reddy, Chairman of GVK group, in a statement said, “This will enhance shareholders value enabling the company to increase the capacity of coal power business and also help in assured supply of raw material.”

Source – Business Line

Shunglu panel on power discoms to submit report next month

The high-level Shunglu Committee, which is reviewing the financial health of power distribution companies, is likely to come out with its report next month.

Many power distribution companies (discoms) are in poor financial health, raising concerns about the possibility of high loan defaults.

The report of the high-level committee on financial position of distribution utilities is almost complete and is expected to be submitted, probably to the Planning Commission, in October, a committee member said.

The panel is chaired by former Comptroller and Auditor General VK Shunglu.

According to the official, the report would have the financial statements of distribution utilities updated till 2009-10.

The committee’s terms of reference include a review of the accounts of state electricity boards and power distribution companies (discoms). There are around 73 distribution utilities in the country.

Going by estimates, electricity distribution losses totalled a staggering Rs 70,000 crore in 2010-11 and is projected to rise further in the coming years.

The mismatch between power tariffs and the cost of generating electricity is cited as one of the key factors hurting the financial health of discoms.

Poor financial position of distribution utilities is a major concern for the fast-growing Indian power sector, which is expected to see a capacity addition of over 50,000 MW in the 11th Five-Year Plan (2007-12).

Source – Business Standard

ADB approved a US$100 Million Loan Advances Asia’s Largest Solar Park

ADB has approved a US$100 million loan to the state of Gujarat in western India to accelerate the rollout of one the world’s largest solar power facilities.

The funding for the Gujarat Solar Power Transmission Project will support the 500 megawatt Patan Solar Park, Asia’s largest such project, located at Charanka village about 60 km (40 miles) from India’s border with Pakistan.

The funds will be used to build a substation, smart grid transmission lines and other equipment to collect and distribute solar power from this remote arid area, which can expect sunshine 330 days a year.

Once transmission lines and substation are installed, private companies will find it more cost-effect to set up large-scale solar energy generating plants at Charanka, bank officials say.

“By putting in reliable power transmission facilities in the solar park, Asian Development Bank will help draw in private sector developers, while providing a model which can be replicated to scale up solar power in a significant manner in India,” said Naoki Sakai, senior climate change specialist with the bank.

Japanese multi-national corporations Sharp, Panasonic, Mitsui and the Toshiba Mitsubishi-Electric Industrial Systems Corp., the Swiss corporation Oerlikon and Germany’s Schott Solar have “evinced interest” in setting up units in the park, according to the Office of Gujarat Chief Minister Narendra Modi.

Charanka is one of several large scale solar energy parks that Gujarat plans to build to meet rising demand for power in the state and to help reduce its use of fossil fuels.

The parks will provide developers with the necessary permits and services to fast track the rollout of solar generating stations.

They will also help the government of India realize its goal of building solar facilities with total generating capacity of 20,000 megawatts by 2022.

Along with physical infrastructure, the project will provide vocational skills training for up to 300 people in target areas, with 30 percent of them women, as well as energy-based livelihood programs for up to 100 poor women.

The loan from ordinary capital resources will have a 25-year term, with a five-year grace period. The government of Gujarat will provide matching funds of nearly $37 million for the transmission project, for a total project cost of almost $137 million. The Gujarat Energy Transmission Corporation and the government of Gujarat will jointly execute the project.

The Gujarat government has agreed to purchase 933 megawatts of power from Charanka.

The U.S.-based Clinton Foundation, headed by former President Bill Clinton, is partnering with the Gujarat government on the solar park. The Clinton Climate Initiative helped to select the site.

“The CCI in its report for setting up the park at the north Gujarat site found that, at 5.6, solar irradiation here is highest in the country. Rajasthan has a comparable advantage, but its dusty climate discouraged CCI,” said an official in the Office of the Chief Minister.

Modi formally laid the foundation stone at Charanka solar park on December 30, 2010, describing the event as “the sunrise of India’s future energy program.”

Modi said that the heat where Charanka is located has been considered a bane, but that same heat will become a mint for the area once the solar park is generating electricity.

He said that in the past no one was willing to even visit the remote area, but now companies are lining up to set up projects there.

“The solar park will usher in a new revolution in this area. We will ensure that the project benefits the local people,” he said.

The Charanka solar park will be built on 2,000 hectares (1,000 acres) of government wasteland. In addition to solar power plants, factories making solar panels and other equipment will be located on the site.

Modi has distributed letters of agreement to 14 private sector firms for generating 171 megawatts of solar energy at the park.

The chief minister said that Charanka would be developed as Swarnim Surya Tirth, which translates as Golden Sun Pilgrimage. He asked the companies setting up power plants in the park to build a Sun Temple in the area, and to develop an adjacent lake, which would create jobs for local youths.

Modi said, “By harnessing solar energy to generate 500 MW power, we will be able to cut carbon emissions,” as he encouraged the audience to preserve natural resources for future generations.

Recently, Prime Minister Manmohan Singh announced that solar power would be a key part of his plan to deal with climate change.

Currently, the largest solar power project in the world is a solar thermal plant in California’s Mojave Desert being developed by BrightSource, with an capacity of up to 900 megawatts of power.

Govt trying to increase power generation through NTPC: Shinde

VISAKHAPATNAM: Union Power minister Sushil Kumar Shinde on Sunday said the Centre was taking all measures to increase power generation in the country through the projects taken up by the National Thermal Power Corporation (NTPC). 

Declaring the full-load commercial operation of NTPC’s Simhadri Super Thermal Power project unit three’s stage-II of 500 MW unit at Parawada on the city outskirts here on Sunday, Shinde said the present power generation capacity of NTPCtouched 1.80 lakh MW from the 1.23 lakh MW, when he took over as Union Power Minister in 2006. 

NTPC had plans to generate 83,000 MW from projects, presently under construction in the country, he said adding that energy shortages in the country has come down from 18 percent to four percent, the minister said. 

Stating that Plant Load Factor (PLF) had gone up, the Congress leader said transmission and distribution losses had decreased to 26.5 percent from 36 percent and that it would further decrease to 15 percent in the near future. 

Noting that NTPC was one of the biggest power generating organisations in the world, Shinde said the corporation had been making profits every year. 

NTPC had achieved Rs 9,200 crore profits last fiscal. Shinde assured to solve problems of the displaced persons, who had lost their lands for Simhadri Project. 

NTPC Chairman and Managing Director Anup Roy Choudhary claimed that NTPC was generating one third of the power in India and was number one in power generation in the world. 

He said the 500 MW unit of the Shimhadri-stage-II was synchronised with the grid on March 29 this year and the generation capacity of NTPC Simhadri had gone up to 1500 MW with commissioning of the present 500 MW Unit-III. 

Unit one and two of the project had commenced commercial operation ahead of schedule in September 2002 and March 2003.

Source – TOI

Energy conservation: Teri signs MoU with HUDCO

PUNE: The Energy and Resources Institute (TERI) signed on Tuesday a Memorandum of Understanding (MoU) with Housing And Urban Development Corporation Ltd (HUDCO) to encourage energy conservation in cities and urban areas .

Energy conservation is a key issue for India with its power and energy shortages. There is a growing concern over the likely adverse impact of climate change and recognition of the fact that effective steps are needed to be taken for reduction of Green House Gas Emission. Buildings are responsible for at least 40 per cent of energy use in most countries and are major contributors to global emissions. Energy efficiency in buildings is very crucial in Indian context since construction sector is growing at a very fast pace.

R K Pachauri, Director General, TERI, said, “With the high rates of economic growth that India is registering and is likely to achieve in the future, a major expansion in infrastructure is bound to take place in the coming years. To ensure efficient use of resources, including energy, lower levels of environmental impacts and meeting the challenge of climate change, it is essential that we carry out greening of India’s infrastructure.”

The MoU between HUDCO and TERI represents a major partnership to achieve the establishment of green infrastructure in this country with multiple benefits to society.
V P Baligar, Chairman and Managing Director, HUDCO, said, “Under the purview of this MoU, TERI and HUDCO have agreed to promote Government of India’s directive that all buildings constructed by the Central Government and Public Sector Undertakings should at least aim to achieve three star rating of green building, meaning thereby that the energy conservation shall be central focus, in planning, design and construction. The major areas of cooperation which the MoU envisages are; promotional activities, incentive package, capacity building, joint research and consultancy.

Source – TOI

Centre to devise new formula for royalty on coal

Faced with a demand from major coal producing States such as Jharkhand, Orissa, Chhattisgarh and Madhya Pradesh, the Centre is considering royalty on ad-valorem basis.

A study group, set up by the Ministry of Coal, will recommend revision of royalty rates on coal and lignite. Coal Ministry officials said the study group had already collected views/comments from the stakeholders concerned. The new royalty rates would be notified by the government after examining the group’s recommendations.

Source – The Hindu

Allahabad Bank joins hands with Tata BP Solar India Ltd.

Public sector lender Allahabad Bank has tied up with Tata BP Solar India Ltd. whereby the bank will be offering loans in rural areas to customers for installation of solar off-grids made by Tata.

According to a statement released by the bank, the bank would be offering ‘capital subsidy cum refinance scheme for installation of solar off grids.

The customer segment to be included for this scheme involve farmers, agricultural labourers, rural artisans, professionals, entrepreneurs and salaried persons and others.

The lender has link ups with Kirti Solar and Bhaskar Solar.

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