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NTPC Ltd, country’s largest power producer, plans to acquire operational coal-based power stations but only those built with Indian, not Chinese, equipment and with lower generation costs, which will keep many private plants out.
The company has invited bids from promoters, lenders or financial intermediaries offering their domestic coal-based power plants.
The company had earlier shelved buyout plans after exploring about 50 proposals due to concerns on valuations, a company executive said. “The fresh tender does not propose to value the assets. It will be based on bidding by the interested promoters. In no case the per megawatt cost should be more than Rs 3.5-4 crore,” the official said.
“The buyout for us will be as good as placing a turnkey contract. The local content clause will keep Chinese equipment at bay,” he said, adding the tender does not press the plants to have assured coal supply or power purchase agreements.
Another NTPC official said the company has not apportioned any funds for the proposal but it can raise finance as and when required. The company’s capital expenditure estimate for the current financial year is Rs 28,000 crore.
The proposal comes at a time when the government is trying to resolve stressed loans assets in sectors like power and steel. The power ministry had earlier identified 34 such stressed assets with combined capacity of 40 GW.
The company will only be looking at running power plants commissioned in last three years that are close to any coal source and whose cost of power generation is less than NTPC’s generation cost, a senior official said.
The average cost of electricity generation from NTPC stations last financial year was Rs 3.19 per unit. NTPC has an installed capacity of 51,708 MW comprising 28 coal-based, eight gas-based and 13 renewable energy and hydro power projects while another 20,000 MW projects are under construction.
It is also contemplating increasing its generation assets by means of possible acquisition of “coal-based power assets in India. Through this request for proposal, NTPC intends to shortlist suitable operational domestic coal-based power assets located in India for possible acquisition,” the tender document said.
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