Anil Ambani led Reliance Power to bid for stressed power projects

Reliance Power (RPower) plans to take an inorganic path for growing its business. The company will bid for stressed thermal power projects, take up operation and maintenance (O&M) of troubled power plants and also provide mine development services.

As many as 34 power projects or around 40 gigawatt (gw) of capacity has been categorised as non-performing assets (NPAs), of which several are headed to the National Company Law Tribunal (NCLT) for resolution.

A report on stressed assets in the electricity sector tabled in the Parliament shows that the total outstanding debt with around 34 stressed power generating projects stood at around Rs 1.74 lakh crore as of June 2017, citing Reserve Bank of India (RBI) data.

Besides these 34 projects, around 24 gw of gas-based power plants are shut due to non-availability of fuel, putting investments to the tune of about Rs 1.2 lakh crore at stake.

A sizeable number of these stressed thermal power projects may go under the hammer through a competitive bidding process, making it a lucrative business option for players within the power sector. It is this space that Anil Ambani-promoted RPower is targeting.

"We are looking at key growth opportunities for the company. One of those is inorganic asset acquisition of stressed thermal coal-based assets through resolution process by lenders or under the NCLT regimes," said Ambani while addressing shareholders during the annual general meeting on Tuesday.

"Besides acquisition, we are also looking at opportunities in the operation and maintenance services for stressed power projects which are under the review petition of the resolution," said Ambani. Even state-run NTPC is looking at this vertical for future business.

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The third option that the company wants to look at is providing mine development operator service as RPower is the largest private sector coal mining company.

Sharing the details of its exit from 3,960 megawatt (mw) Tilaiya Ultra Mega Power Project, Ambani said that the measure has paid off well through the sale of the asset to Jharkhand Urja Vikas Nigam Ltd. On the similar lines, RPower now wants to pursue resolution for 4,000 mw Krishnapatnam Ultra Mega Power Project during the ongoing fiscal.

Source: DNA Money