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MUMBAI: The Centre has reportedly floated a Cabinet note on the proposal to sell a 10% stake in power generation company National Thermal Power Company (NTPC) next financial year.


The move is part of the government’s record FY16 disinvestment plan of R69,500 crore through which it aims to achieve its Budgeted fiscal deficit target of 3.9% next fiscal.


The government is yet to float a proposal seeking financial and legal advisors. While more clarity is awaited, it is projected that government may offer about 4-5% discount to retail investors.


The sale of 10% stake in India’s largest power company corresponds to a little more than 82.45 crore shares and could fetch R12,600 crore at current market price. The government owns 74.96% stake in the New Delhi-based NTPC, stock exchange data as on December 2014 show.


The NTPC scrip declined more than 3% on Wednesday to R152.90 apiece, reacting to stake-sale plan reports. Trading volume spiked nearly 2.7% the stock’s 30-day average volume. More than 1.75 crore NTPC shares were traded on the BSE and the NSE against an average 65.37 lakh shares traded in the previous 30 trading sessions, Bloomberg data showed.


Apart from NTPC, the government plans to sell stake in additional 10 PSUs, including Power Finance Corp (R1,866 crore), Rural Electrification Corp (R1,712 crore), Indian Oil Corp (Rs 8,483 crore), Bharat Heavy Electricals (R3,159 crore) and NMDC (R5,226 crore).


The FY16 disinvestment target also comprises strategic sale in Hindustan Zinc (HZL) and Balco to Vedanta Resources, as well as selling stake in certain private companies held through the Specified Undertaking of the UTI (SUUTI).


The government will also look at reducing its stake in some of the 33 PSU companies that need to comply with the Securities and Exchange Board of India (Sebi) minimum public shareholding norms. The list includes Coal India (4.65%), which could fetch the exchequer close to R11,300 crore.


Under the Sebi rules, all listed companies are required to have at least 25% public shareholding till June 2017 or three years from the date of listing for companies listed after June 2014.


The Centre has so far raised R24,277 crore by selling stake in Steel Authority of India (SAIL) and Coal India (CIL) – the largest equity offering in the history of Indian capital markets. The government pared its target to R31,350 crore from the intially Budgeted target of R43,425 crore.


Finance minister Arun Jaitley recently indicated an aggressive disinvestment programme to meet the fiscal deficit target of 4.1% for FY15 and 3.9% for FY16.

(Source: The Financial Express, March 19, 2015)




KOLKATA: The Narendra Modi government may be quite vocal when it comes to its commitment towards clean energy, but when reality bites, it is seen as taking a back seat. The tight finances have forced the government to silently discontinue one of its key subsidy schemes promoting renewable energy.


The share of solar power within the renewable energy space was 8% in FY14 and experts feel that the withdrawal of the subsidy may hamper the desired growth in capacity addition in FY16. The scheme was discontinued with effect from March 1.


The Ministry of New and Renewable Energy (MNRE) wanted commercial banks to stop giving loans for installing solar home lighting system under the subsidy scheme since it is burdened with pending subsidy claims. This bank loan cum capital subsidy scheme was part of the Jawaharlal Nehru National Solar Mission (JNNSM). “It’s a temporary withdrawal till the clearing of the pending subsidy,” a senior official with the ministry told ET. “The finance department has not released the fund,” he said. ET has learnt that the size of pending claims is Rs 130 crore, which is just about 5% of the annual plan of Rs 2,500 crore to promote renewable energy.


“The Ministry is in the process to clear dues for the loan already extended by the banks,” the ministry said in a note to National Bank for Agriculture and Rural Development and advised it to instruct banks to stop lending till further notice.


“JNNSM Phase aims to give a major thrust to off-grid solar power in areas where grid has not reached and many parts of the country where electricity supply situation is very poor. If this news is true, it would be negating this objective,” said Debasish Mishra, senior director with Deloitte Touche Tohmatsu India Pvt. Ltd.


Banks provide Rs 25,000 to Rs 1 lakh loan for installing solar photovoltaic lighting systems in both urban and rural areas and the borrowers get back 30-40% of it as capital subsidy. But as the government fails to foot the subsidy bill, the borrowers are forced to pay interest for the entire project cost. The ministry may review its decision again in June after examining its financial position.


India Ratings and Research had said in a report in January that capacity additions in the renewable energy sector in FY16 was expected to be driven by the solar segment given the policy thrust towards setting up solar installations. It had expected the share of solar capacity in the renewable energy sector to increase to 11% in FY16. “Government is determined to achieve target 175 MW of renewable energy capacity by 2022. Clean energy cess collected from thermal coal users should be effectively used to promote renewable energy,” Deloitte’s Mishra said.

(Source: The Economic Times, March 19, 2015)




NEW DELHI: Power generation in the country went up by 10 per cent in the April 2014-February 2015 period, with the country gearing up to meet greater electricity demand.


Thermal power generation in particular went up nearly 12 per cent during the period to 803,875.07 million units, according to the Central Electricity Authority (CEA). The higher generation helped reduce the power supply deficit to 3.1 per cent in January 2015 as against 3.3 per cent in the same month last year.


The drop in power supply deficit is even greater for the April – January 2015 period compared to the same period last year. The power supply deficit in the current fiscal till January was 3.8 per cent as against 4.3 per cent in the corresponding period last year.


“Nothing new has happened apart from the new Government coming to power. Such a growth in power generation hasn’t happened in the last many years. We are certainly not happy about all of this. I have much more ambitious targets,” Power, Coal and New and Renewable Energy Minister Piyush Goyal recently told BusinessLine .


CEA data shows coal supply has also improved. On March 15, 18 out of 100 thermal power plants had less than seven days or critical levels of coal stocks – compared to a figure of above 50 between August-September 2014.


Goyal had said that the shortage was due to stepping up of thermal power generation because of the fall in hydro power due to rainfall shortage.


Coal India has also ramped up production. In February 2015, the output increased nearly 13 per cent to 47.98 million tonnes. In the April-February 2015 period the company’s production grew 6.8 per cent to 436.96 million tonnes.

(Source: Business Line, March 19, 2015)




MUMBAI: The electrical and industrial electronics industry witnessed a growth of 11.47% during October-December 2014 although the sector continued to be plagued by high imports, according to industry body IEEMA. “Although high imports, which was nearly over Rs 2,000 crore in 2014, still plague the industry, policy changes and industry initiatives are eventually showing signs of evolution for the sector,” said IEEMA president Vishnu Agarwal in a statement. “There is a positive momentum,” he added.


Cable, low voltage and high voltage switchgears were the major drivers of the sector, but power transformers and low-tension motors continue to show declining trend, said Indian Electrical and Electronics Manufacturers Association (IEEMA).

(Source: The Economic Times, March 19, 2015)




NEW DELHI: Tariff of electricity generated from units 3 and 4 of Kudankulam Nuclear Power Plant (KKNPP) is likely to be double from those generated from unit 1 and 2, due to liability issues, the government said today.


The unit 3 and 4 of KKNPP is expected to take off in 2020-21.


“The present tariff of power generated from KKNPP unit 1 and 2 is Rs 3.94 per kWH. The anticipated first year tariff of KKNPP units 3 and 4, is to be Rs 6.30 kWH,” Jitendra Singh, Minister of State for the Department of Atomic Energy said in a written response to a question in Lok Sabha.


Due to liability issues, the cost of units 3 and 4 of the Kudankulam Nuclear Power Project has shot up to Rs 39,747 crore, more than twice the cost of units 1 and 2, which will lead to an increase in per unit cost of power, he had said.


The cost of units 1 and 2 is Rs 17,270 crore.

(Source: The Economic Times, March 19, 2015)




Banks in India, and globally, are building up a healthy appetite for clean energy financing, announcing commitments for larger projects in a fast expanding industry. Citigroup said it plans to lend, invest and facilitate deals worth $100 billion by 2025 to support projects that will fight climate change and protect the environment. That would mean projects in renewable energy generation, energy efficiency and sustainable transport. “Simply put, it is a $100-billion investment in sustainable growth. These efforts do not constitute philanthropy, nor do they represent costs. In fact, they reduce costs,” Chief Executive Officer Michael Corbat said last month. The bank had set a goal of arranging $50 billion in deals back in 2007, which was met in 2013, three years ahead of schedule.


Bank of America had committed to support $50 billion in deals for low-carbon initiatives in 2012, while the Goldman Sachs Group announced a $40-billion programme in the same year.


The State Bank of India committed to provide Rs 75,000 crore ($12 billion) over the next five years for the renewable energy sector to support 15,000 megawatts (Mw) of capacity. “Of course, the proposals have to be viable, and they also have to be viable as per the norms of the banks,” chairperson Arundhati Bhattacharya said at the RE-Invest conference last month. That was the largest commitment by any bank.


ICICI Bank committed to help build 7,500 Mw, followed by L&T Finance, the Indian Renewable Energy Development Agency or IREDA, and many others, including the Bharatiya Mahila Bank. It is fairly certain that not all these announcements will actually be put into action, but it is encouraging to see that the list of probable financiers is not dominated by the multilateral funding agencies, as would have been the case a few years ago. Projects are already being funded on the strength of their revenue stream, with no recourse or on a limited recourse basis.


It is well known that renewable energy projects are especially sensitive to interest rates, given that all the funding is required upfront. The recent easing of interest rates – with the central bank lowering the benchmark repurchase rate for the second time this year – is, therefore, especially positive for the renewables sector. The repurchase rate – the rate at which commercial banks borrow from the Reserve Bank of India – now stands at 7.5 per cent, and further cuts are expected through the year.


A 200-Mw project being built in Dubai that managed to secure financing at an all-in rate of 4 per cent, has offered to supply power from a solar photovoltaic plant at a record low rate of 5.845 US-cents per unit, or about Rs 3.70. Saudi Arabian company ACWA Power is the developer. In an interview with Bloomberg New Energy Finance, Paddy Padmanathan, president and CEO of ACWA Power, said that efficient panels, an efficient construction contractor, 27-year debt and a debt:equity ratio of 86:14, in addition to the competitive interest rate, all helped in arriving at the “low” tariff.


In contrast, interest rates for developers in India are easily in double digits while the tenure is limited and debt-equity ratios are conservative. That would explain why the levelised tariff in recent auctions ranges between Rs 6.50 and Rs 7.50 per unit.


Easing financing and providing it for longer tenures at lower rates would certainly give a boost to renewables in India, but getting to 175,000 Mw – the target announced in the Budget – would also require adequate unlocking of land resources for renewables as well as an expansion of the transmission capacity.


The successful mobilisation of Rs 1,000 crore ($160 million) by YES Bank last month via a green infrastructure bond issue could set an interesting trend for financing renewables. “The Reserve Bank offers incentives for bonds used to fund infrastructure. This is the first time that this segment is being used for offering green bonds,” said a spokesperson for the bank. The bonds will follow the international green bond principles, which specify the use of proceeds and reporting requirements for investments. YES Bank has earmarked the funds mobilised for renewable energy generation projects – solar, wind, biomass and small-hydro. The Indian arm of KPMG will provide the assurance services on the use of proceeds.


A statement from the bank said that it witnessed strong demand from leading investors, including insurance companies, pension and provident funds, foreign portfolio investors and mutual funds. More issuers looking to tap this demand can be expected. Green bonds have surged in popularity internationally, with a record $38.8 billion issued in 2014, more than double the 2013 total of $15 billion.

(Source: Business Standard, March 19, 2015)




PUNE: REConnect Energy Solutions, a renewable energy consultancy and sourcing firm, has launched an online marketplace for power consumers and generators to buy and sell green electricity.


The marketplace, clickpower.in, will enable open access customers to explore options to buy green electricity from various energy generators by monitoring real-time deals.


“In the renewable energy sector especially, buying power through open access has been happening through brokers and other intermediaries. This platform is an attempt to orga nise the sector, while keeping transactions from generators and buyers transparent,” said Vishal Pandya, an IIT-Bombay alumnus, who started RECon nect five years back with Vibhav Nuwal, an MBA graduate from the Columbia Business School.

(Source: The Economic Times, March 19, 2015)




NEW DELHI: With the two select committees, set up to study the Mines and Minerals and the Coal Mining Bills, submitting their reports to the Rajya Sabha, the government hopes the Bills will be passed by the Upper House. The ordinances on them are slated to lapse by April 5. However, should the Upper House for any reason not take up the two Bills on Thursday, then the government would extend the session till Tuesday.


Parliament was slated to go into recess from Saturday. The two reports were tabled amid uproar from the opposition benches. The fate of the two Bills was discussed at the meeting of the Cabinet Committee on Parliamentary Affairs, which decided to hold two additional sittings on Monday and Tuesday “if required” to pass the Bills.


Sources in the government said, “The Mines and Minerals Bill would have to be passed with two amendments as recommended by the select committee. The coal mines Bill has been adopted without any amendments. In that case, the mines Bill will have to be sent back to the Lok Sabha to pass it afresh.” The government has estimated if the mines Bill gets the green flag from the Upper House on Thursday then it can be taken up by the Lok Sabha on Friday and cleared between 12 noon and 3.30 pm after which the House takes up private member Bills.


However, if things don’t go according to the plan, then the government has the prerogative to extend the session by two days.


Opposition members in the Upper House are unwilling to have the first half of the Budget session extended.


Leader of the Opposition in the Rajya Sabha Ghulam Nabi Azad protested against the National Democratic Alliance government for “rushing” the Bills without referring them to the Standing Committee for close scrutiny. He stated that concerned stakeholders, labour organisations, etc., had not been taken on board. Protesting Congress MPs trooped into the well of the House, forcing a 10-minute adjournment.


The government has been emphasising on two aspects to engineer a split in the opposition ranks — states such as West Bengal and Jharkhand, etc., will be benefited by the proceeds of the auction. Also, those opposing the Bill were to be portrayed as being anti-development, as it would entail opposing coal block auctions.


Proroguing Parliament a possibility


With little prospect of getting opposition parties on board for the contentious land acquisition Bill, the government would need to re-promulgate the land ordinance before it lapses on April 5. However, the technical difficulty of doing so within the recess of Parliament would have to be dealt with by proroguing Parliament session after March 20. Government sources said the UPA government had taken recourse to this tactic several times, setting a precedent.

(Source: Business Standard, March 19, 2015)

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