Captains Speak  ^{123    15}   

Published: Aug 29, 2019
Updated: Aug 29, 2019

JSW Energy: Aiming at doubling capacity

“We are looking at a 10 gigawatt (GW) capacity in the next 3-5 years from the current level of 4.5 GW, through a mix of organic and inorganic routes,” maintains Prashant Jain, Jt. Managing Director and CEO of JSW Energy.

According to him, the company has entered into exclusive discussions with GMR Energy for acquisition of its subsidiary, GMR Kamalanga Energy. The GMR subsidiary operates a 1,050 MW power plant in Orissa. (If the deal happens, JSW Energy will acquire a power plant after a break of more than four years. In 2015, the company had bought two hydro-power assets from Jayprakash Power Ventures for Rs. 9,700 crore).

Maintaining that “hydro water flow was good,” Mr. Mahendra adds, “Since 2019-20 is the first year for the new five-year MYT tariff, because the last five-year efficiency was adjusted in the tariff itself, there was significant tru-up provision in Q1FY20. The provision on account of the difference between CERC’s old MYT and new MYT is about Rs. 43 crore in Q1FY20. This provision will recur going forward but the numbers can vary. But the adjustment will continue, going forward. In addition, there was a one-off adjustment of Rs. 18 crore inQ1FY20, which is technical in nature. This Rs. 18 crore one-off is only an accounting adjustment for Q3FY19 and has been pushed to the subsidiary account in Q1FY20. So the impact of this one-off is nil in Q1FY20. This is why, despite good water flow, the EBITDA of JSW Hydro declined.”

PLANT REVENUES

Revealing that “Balmer revenue jumped by 32% to Rs. 863 crore,” he adds, “Balmer revenue is higher due to onetime booking of both revenue and fixed cost consequential order received for variable cost pass-through for increase in provisional tariff from 75% to 80%, so segmental revenue was adjusted by Rs. 212 crore. While it increased the topline it had no impact on EBITDA or PAT. So the lower EBITDA is due to the nature of the two-part tariff.”

Referring to the Ratnagiri plant, he points out that for medium term there is a bid through PFC for 2,500 MW, with NHPC acting as aggregator. The company has put in bids and is one of the shortlisted generators. Some states start showing interest. NHPC is in the process of aggregating from various states. The supply has to commence from Oct 1, 2019. As it happens in the first bid it may delay for a couple of months. The company has put in a bid for 490 MW for 3 years. As far as the Ratnagiri TPS is concerned, the company will reach FY19 volumes in the current year also. The company has visibility as it has tied up shorter supply for the July-Sep 2019 quarter. Further, there are also 41 MW additions in the group captive.

Other points made by Mr. Jain were:

• The 10 MW of solar capacity is already installed and commissioned. The company has not committed any further capex on renewable capacity.
• The capex towards the 2x18 MW is completed and no further capex is pending with about Rs. 35-40 crore incurred in Q1FY20.
• Proposed acquisition of the 1,000 MW Tamnar TPS from JSPL terminated due to elapsing of long stop date without completion of stipulated conditions precedent.
• The board of directors has approved raising of longterm funds upto Rs. 2,500 crore through issuance of redeemable NCDs by way of a private placement.