India Power takes over French group’s power plant in AP in a $1 deal

India Power Corporation Limited (IPCL), a Srei Group company, has taken control of the 1,000 MW thermal power plant of Meenakshi Energy Private Limited in Nellore, Andhra Pradesh

IPCL acquired Meenakshi from French power giant ENGIE for token amount of $1, in a deal agreed upon in late February, said India Power chairman Hemant Kanoria, adding that the acquisition will enable India Power to add capacity of thermal power generation to its portfolio.

Meenakshi has a coal fired thermal power plant in Nellore, Andhra Pradesh. Of the 1,000 MW capacity, 300 MW is already operational and 700 MW is under advance stage of implementation, which will be commissioned by the third quarter of next year.

The Engie Group was struggling to run the plant and also wanted to reduce its carbon footprint, according to Kanoria.

Meenakshi Power has a consolidated debt of Rs2,800 crore, of which the company still has around Rs1,600 crore in its treasury. It will spend around Rs600 crore to commission the remaining 700 MW of generation capacity and still have around Rs1,000 crore left to meet working capital needs, Kanoria said.

The Srei Group, which is into the infrastructure finance business, took over the erstwhile DPSC Ltd from state-owned Andrew Yule and Co Ltd and after merging with group firm, renamed it India Power.

It has revamped the company's generation capacity and is now expanding the business by acquiring new plants.

The company has already commissioned 300 MW of generation capacity at Nellore and the remaining 700 MW will be ready by the middle of next year, Kanoria said.

The comp[any is also set to commission the first unit of its 450 MW power plant in Haldia in West Bengal. The plant will start generating 150 MW from the end of December, the chairman said.

Both the plants will run on coal imported from Indonesia, he added.

The plants will be managed by India Power's 50:50 joint venture with Germany's Uniper Kraftwerke GmbH, launched two months ago. The joint venture will provide the technology for improving operational efficiency at these thermal power plants.

India Power is looking to acquire more stressed assets like Meenakshi Power and a team headed by Kanoria's son Raghav Raj Kanoria, a director, is examining proposals from lenders.

The company is also looking to expand its distribution business and has applied for new licences in West Bengal's East Midnapore district and Gurgaon in Haryana, Kanoria said. It currently supplies power in some parts of West Bengal and Bihar.