By Our Correspondent
BHUBANESWAR/DHENKANAL: The Sajjan Jindal owned JSW Energy has reportedly put on hold its proposed acquisition of GMR Kamalanga Energy Limited in Odisha’s coal bearing Dhenkanal district in view of the COVID-19 and nationwide lockdown, sources said here on Friday.
Earlier in first week of April this year, the Competition Commission of India (CCI) had approved the acquisition by JSW Energy Limited (“Acquirer”) of GMR Kamalanga Energy Limited (“Target”), under Section 31(1) of the Competition Act, 2002.
The proposed combination envisages the acquisition of the entire (i.e., 100%) shareholding of the Target by the Acquirer. The Acquirer (also through its subsidiaries) is engaged in power generation, power transmission, power trading, coal mining and power equipment manufacturing.
Presently, the Acquirer has a power generation capacity of 4,541 MW comprising of portfolio of thermal (3,140 MW), hydro (1,391 MW) and solar (10 MW).The Target is engaged in generation of power through its coal based thermal power plant at Kamalanga village, Dhenkanal district, Odisha.
The Sajjan Jindal led JSW Group had own as many as 4 major iron ore blocks in Odisha’s mineral rich Keonjhar-Sundargarh and also taken over debt ridden Bhushan Steel and Power Ltd in the State and also eyeing on several coal blocks , which will put for auction in July this year.
JSW earlier this year entered into an agreement with Indian infrastructure firm GMR to buy an operational 1.05GW power plant in Odisha state for 53.21bn rupees ($704mn), as part of broader plans to raise its generation capacity to 10GW over the next three to five years from just under 4.6GW currently.
The decision to put the proposed acquisition on hold is a “combination” of uncertainty surrounding India’s power demand outlook, as well as the prospects for thermal power generation in the country amid a push for renewable energy.
The comments come as the company’s total revenues slipped by 8pc during the January-March quarter from a year earlier to Rs18.48bn. But its profit for the quarter rose to Rs1.08bn from Rs40mn a year earlier as expenses, including costs of imported coal, fell.
JSW imports around 5.5mn-6mn t/yr of coal for its 1.2GW Ratnagiri project on the west coast of Maharashtra state and the 860MW Vijayanagar in south India’s Karnataka state. The power plants have conditional approval from authorities to blend up to 50pc of domestic coal with imports.Importing coal for the two plants is “the most viable option” at present given the logistical constraints in securing domestic coal, Jain said. But the company will look at the looming opportunity in the commercial coal mining space and evaluate if switching to domestic coal makes economic sense, he added.
The company sees clean energy sources such as wind, solar and hydropower driving its growth. It is looking at opportunities in the hybrid space in India where a utility will be expected to supply electricity around the clock by combining power produced from renewables, as well as from coal-fired power plants.
JSW is already in possession of sites with a potential to generate 1GW of electricity from solar and wind energy. The company is awaiting clarity amid the easing of Covid-19 lockdown conditions in India before starting construction, a company official said.
