Thailand’s EGCO eyes Indian power projects

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Thailand’s Electricity Generating Public Company (EGCO) is scouting for power generation assets in India, including those in the clean energy space, two people aware of the development said.

State-run Electricity Generating Authority of Thailand (EGAT) owns 25.41% in EGCO, a listed company. According to information available on its website, the EGCO Group has a contracted capacity of 4,573.81 megawatts (MW) through 28 power projects in Thailand and in countries such as Australia, the Philippines, Laos and Indonesia.

EGCO’s interest comes against the backdrop of India’s focus on improving electricity access with the government launching the Rs16,320 crore Pradhan Mantri Sahaj Bijli Har Ghar Yojana, or Saubhagya to provide electricity connections to over 40 million families in rural and urban areas by December 2018. This in turn will help in improving education, health and connectivity with the multiplier effect of increased economic activities and job creation.Mint, on 2 October, carried a report on the Indian government’s plan to leverage the Saubhagya architecture to promote induction cooking, heating and charging for electric vehicles, apart from the initial target of providing lighting.

“A team from EGCO has been doing the rounds here. They are interested in acquiring power generation assets including ones in the clean energy space,” said one the persons cited above, requesting anonymity.

There is a growing consolidation in India’s green energy space, given the record low tariffs. While wind power tariffs plummeted to Rs2.43 per kilowatt-hour (kWh) at an auction conducted by state-run Gujarat Urja Vikas Nigam Ltd last week, auctions conducted by state-run Solar Energy Corp. of India last week threw up winning bids of Rs2.47 and Rs2.48 per unit.

“EGCO has been looking at the India subcontinent,” said the second person cited above, who also did not wish to be identified. EGCO’s strategy involves acquiring ‘operating assets to realize quick earnings, with a focus on the Asia Pacific region,’ with renewable power contributing to 30% of its portfolio by 2026, according to information available on EGCO’s website.

In response to a direct query about EGCO’s plans to acquire power generation assets in India, a company spokesperson said in an emailed response, “If there is any update regarding our project acquisition, we will certainly release to public.”

Some of the of the clean energy deals include ReNew Power’s plans to acquire global private equity firm Actis Llp’s Ostro Energy Pvt. Ltd, Taaleri Plc’s interest in acquiring a stake in Finland’s state-controlled power utility Fortum Oyj’s operational Indian solar power projects and Greenko Group and Hero Future Energies Pvt. Ltd’s interest in acquiring Orange Renewable’s portfolio.

Subhash Chandra’s Essel Infraprojects Ltd has mandated Investec, an investment bank, to find a buyer for its solar business; and diversified conglomerate Shapoorji Pallonji Group is in stake sale talks for its solar portfolio.

EGCO’s interest comes against the backdrop of India planning a slew of electricity sector reforms such as penalizing discoms for any disruption in electricity supplies post March 2019, and tariff slab rationalization to help improve India’s per capita power consumption of around 1,200kWh, among the lowest in the world.

“A capacity addition of 27.07 gigawatt (GW) of renewable energy has been reported during the last three-and-a-half years under grid-connected renewable power, which include 12.87GW from solar power, 11.70GW from wind power, 0.59 from small hydro power and 0.79 from bio-power,” the government said in a statement on Wednesday.

“Economic growth, increasing prosperity, a growing rate of urbanization and rising per capita energy consumption have increased the energy demand of the country. In order to meet the energy demand, India has a total installed power generation capacity of 331.95GW as on 10 October 2017 from all resources. With a 60.98GW installed renewable power capacity, renewable power has a share of about 18.37% in the total installed capacity,” the statement added.

 

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