More importantly, the KSK Mahanadi assets continue to be
intrinsically valuable and extremely attractive investments as
large greenfield assets with significant common infrastructure for
the entire facility already created and long term PPAs at
reasonably attractive tariffs executed. The Management team
continues to persist with efforts to address the new developments
on fuel as well as other project aspects of KSK Mahanadi at the
earliest as they would enable pursuit of additional future growth
by the Company.
Commenting on the results, T. L. Sankar, Chairman of KSK
said:
"These results are in the context of the extraordinary
regulatory disruptions and difficult circumstances across the
Indian power sector over the last 36 months and the challenging
times and overall economic environment in India. The Company's
management has continued its efforts to address the various
challenges in its operating projects. Results are expected to
further improve upon clarity emerging in the regulatory environment
and the Company addressing the on-ground situations to co-ordinate
planned generation with fuel supplies for the assets.
With a new government in New Delhi, decision making is coming
through and Courts and Regulators are now seeking to establish a
level playing field for power generation. Therefore, power
generation is anticipated to play a central role in supporting the
overall economic growth in the country over the next few years.
With KSK's underlying assets, associated performance and
opportunities, the Company is well positioned to be one of the more
stable, valuable and sustainable players on the Indian power
generation landscape.
KSK's performance during the period was only possible with the
valuable and appreciated support of the various investors in the
Company who have enabled us to pursue appropriate business
opportunities in these challenging times."
For further information, please contact:
KSK Power Ventur plc
Mr. S. Kishore, Executive Director
Mr. K. A. Sastry, Executive Director +91 40 2355 9922
Arden Partners plc
Richard Day +44 (0)20 7614 5900
Asset Updates
-- 3.6 GW KSK MAHANADI POWER PROJECT:
The total gross power generated in the plant during the review
period was 1,444 MWh with an average PLF of 55%. Enhanced offtake
from the first 600 MW unit coupled with the second 600 MW, which is
physically complete and when it exports power will enable further
improvement of the PLF during the second half of the financial
year.
The construction activity at KSK Mahanadi, a large, single
location, greenfield private power plant will continue in a phased
manner with further unit commissioning now targeted over 2016 and
2017. The capital expenditure program on the construction of the
remaining four units and associated infrastructure is conditional
upon confirmation of availability of fuel supplies, transmission
corridor access and other project aspects seamlessly synchronised
for performance.
-- 540 MW SAI WARDHA POWER LIMITED (SWPL):
The total gross power generated in the plant during the review
period was 547 MWh with an average PLF of 23%. The low PLF reflects
the challenging local operating environment and the fuel and
transmission corridor access grid constraints experienced by the
power plant.
While the Company is negotiating power sale arrangements to
commence supplies for part of the capacity that was earlier being
supplied to R-infra, the balance capacity that was earmarked to be
supplied to captive industrial consumers under the long term PPA
commitments also experienced limitations on transmission corridor
access from the local grid. A number of alternate PPA arrangements
are under discussion and it is anticipated that these could provide
the necessary additional utilisation.
A number of developments early in the period, including
unjustified higher coal prices, continued to adversely affect Sai
Wardha Power's profitability and appropriate recompense from
Western Coalfields Limited is being pursued to address this matter.
The Company continues to use every effort to pursue coal price
reduction and the granting of the necessary transmission corridor
access permissions, which will ultimately lead to the enhanced
utilisation and profitability of the Sai Wardha plant whereupon,
profitability is expected to revert to the previously achieved
levels.
-- 135 MW VS LIGNITE POWER PRIVATE LIMITED (VSLP):
The total gross power generated in the plant during the year was
473 MWh, with an average PLF of 80%. The Company is continuing its
efforts to secure necessary long term PPAs from the local grid as
well as appropriate legal reliefs with respect to tariffs from
industrial customers. The Company anticipates that industrial
customers, who have previously experienced extremely high tariffs,
will find the Company's power supplies and tariff proposition more
attractive.
-- 86 MW ARASMETA CAPTIVE POWER COMPANY LIMITED (ACPCL):
The total gross power generated in the plant during the year was
95 MWh, with an average PLF of 25%, primarily due to a graduated
offtake under the long term PPA by the local utility, which was
approved by the Regulatory Commission during May 2014.
With KSK Mahanadi under obligation to provide 225 MW to
Chhattisgarh (the host state), an arrangement has been agreed,
pursuant to consent by the state as well as project lenders at KSK
Mahanadi, wherein 75 MW would be fulfilled from Arasmeta enabling
the surplus power at KSK Mahanadi to be disposed at the higher
tariff to other utilities. Enhanced scheduling at Arasmeta would be
synchronous to the second 600 MW unit operations at KSK Mahanadi.
As a result, the Company anticipates increased plant utilisation,
power generation and revenue from the Arasmeta plant.
-- 58 MW SAI REGENCY POWER CORPORATION PRIVATE LIMITED (SRPCPL):
The total gross power generated in the combined cycle gas fired
power plant during the year was 217 MWh, with an average PLF of
85%. With the continuous supply of gas and the efficient operation,
the plant has produced an operational and financial performance,
which the Company expects to continue in the future.
-- 43 MW SITAPURAM POWER LIMITED (SPL):
The total gross power generated in the plant during the year was
166 MWh, with an average PLF of 88%. Although the fuel cost for the
period under review has increased due to an increase in coal prices
from the Singareni Collieries Company Limited, as well as from open
market purchases, the energy generated in the period has been
supplied to the captive consumers in accordance with the provisions
of the PPA, with the balance of power sold to other customers.
-- 10 MW SAI MAITHILI SOLAR POWER PROJECT:
The total gross power generated in the plant during the year was
8 MWh, with an average PLF of 19%. The 10 MW PV solar power
generation plant is located in the state of Rajasthan, operating
under the Jawaharlal Nehru National Solar Mission.
-- ANCILLARY INFRASTRUCTURE INITIATIVE AT KSK MAHANADI
-- KSK Water Infrastructure:
Infrastructure works, including the construction of the 60km
pipelines and the pump stations for the supply of water for the
Mahanadi project were completed and are operational. The additional
intermediate reservoir works, sufficient to support the continuous
operation of all six 600 MW units, are expected to be completed
over the next few months.
-- Raigarh Champa Rail Infrastructure:
The Company's 15.7 km inward railway line connecting the
Mahanadi plant with the Indian Railways main line was completed,
enabling the movement of coal into the power plant. As regards the
65.5 km line connecting the Gare Pelma coal block to the main line,
this will be implemented after further clarity on the status of
Gare Pelma coal block and supplies under FSA are available.
-- KSK Mineral Resources:
Further developments and further support under this would be
contingent upon the Government decision on the Gare Pelma III coal
block, which is expected in the next few months.
RENEWABLE POWER GENERATION:
The Company continues to pursue specific wind power generation
initiatives as well as work on the hydro project portfolio for
appropriate collaboration opportunities. In response to the
continuing initiative of the Indian Government, the Company is
seeking to develop an additional 250 MW of solar power generation
projects in the medium term. Necessary progress has been made and
procurement advances have been paid to procure equipment at
competitive prices. The Tamil Nadu Electricity Regulatory
Commission has stipulated the necessary tariff arrangement and the
Company is in discussion with Tamil Nadu for necessary PPA
arrangements and execution of PPA at the earliest.
EQUITY AND FINANCING ARRANGEMENTS
During the period, c. GBP40 million of equity was raised by KSK
Energy Ventures Limited ("KSKEV"), KSK's listed Indian subsidiary,
through a Qualified Institutional Placement. Pursuant to approval
of Foreign Investment Promotion Board, which was obtained in
September 2014, 80.8 million warrants convertible into equivalent
equity shares at KSKEV have been allotted by KSKEV in favour of
KSK, enabling KSK's interest in KSKEV at 72.90% level.
Earlier the Company secured debt financing within its Indian
holding companies that enabled the earlier tender offer as well as
the buyout of the entire minority of the KSK Mahanadi project,
resulting in KSK owning a substantial interest in KSKEV, the
subsidiary which owns the majority interest in KSK Mahanadi Power
Company Limited. Also, the Company is pursuing further refinancing
opportunities on more favourable terms at the operating project
level as well to provide the necessary liquidity to retire part of
the existing higher rate debt.
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