Jaiprakash Power Ventures Limited

BSE Code: 532627

CMP: Rs.12.43

Book Value: Rs.22

Market Cap: Rs.3,651.94 crore

Introduction: Jaiprakash Power Ventures Limited (JPVL), is the largest Hydro Power generating Company in the Private Sector in the country. The Company today has operating capacity of 1791 MW (Hydro) and 500 MW (Thermal). Currently it is operating three Hydro Power Plants and one Thermal Power Plant, namely:

i) 300 MW Jaypee Baspa-II Hydro Power Plant in Himachal Pradesh;

ii) 400 MW Jaypee Vishnuprayag Hydro Power Plant in Uttarakhand; 

iii) 1091 MW Jaypee Karcham Wangtoo Hydro Power Plant in Himachal Pradesh; and

iv) 500 MW Jaypee Bina Thermal Power Plant in Madhya Pradesh.

The  implementation  of  1320  MW  (2  X  660  MW)  Jaypee  Nigrie Super Thermal Power Project at Nigrie, Distt. Singrauli in Madhya Pradesh is progressing satisfactorily. And commissioning of first unit has already been done on 3rd September, 2014 and second unit would be done by December, 2014. Steam Generator and Steam Turbine Generator have been supplied by L&T- MHI Boilers Private Limited and Larsen & Toubro Limited. All major statutory approvals are in place. Entire requirement of 5 Million MTPA coal for the Project will be met from dedicated coal mines at Amelia (North) and Dongri Tal-II.  The Financial Closure of the Project has already been achieved. For  400  kV  D/C  Transmission  Line,  Forest  Clearance,  including approval  of  Hon’ble  Supreme  Court  of  India  for  Wild  Life  Son-Ghariyal Sanctuary has been obtained. The Line profile of entire 161 kms route has been completed. Approval for the energisation of 400 kV Bays at Satna Substation has been received from Central Electricity Authority (CEA). The overall progress of implementation of the Project continues to be satisfactory. The first unit of the Project has been successfully synchronised with the grid on 7th May, 2014.  Moreover, to effectively use the fly ash from the Thermal Power Plant and to make the plant environment friendly, a 4 MTPA Cement Grinding Unit at Nigrie, Distt. Singrauli in Madhya Pradesh with its Project Cost estimated at Rs.550 crore is being set up which is expected to be commissioned by March 2015 (Line I) and July, 2015 (Line II) of 2 MTPA each.

Subsidiary Companies: The Company has following subsidiaries :

i) Jaypee Powergrid Limited: It is a joint venture of Jaiprakash Power Ventures Limited and Power Grid Corporation of India Limited (a Central Government Power Utility Undertaking) has set up 217 kms long 400 Kv Quad Bundle Conductor Double Circuit Transmission Line for evacuation of Power from the pothead yard of 1091 MW Karcham Wangtoo Plant in the State of Himachal Pradesh to Abdullapur in the State of Haryana and LILO with the existing Baspa-Jhakri Double circuit line.

ii) Jaypee Arunachal Power Limited: It is a  wholly  owned subsidiary of the Company is implementing 2700 MW Lower Siang and 500 MW Hirong H.E. Projects in the State of Arunachal  Pradesh. The  Company along with its associates will ultimately hold 89% of the Equity of JAPL and the balance 11% will be held  by the Government of Arunachal Pradesh. For  the  2700  MW  Lower  Siang  Hydro-Electric Project, CEA approval was obtained in February, 2010 and revalidation of DPR is in process with CEA. Land acquisition is in progress. In-principle Approval has been granted and Power Purchase Agreements (PPAs) are to be submitted for final approval with respect to the grant of Mega Power status of the project. Draft Rehabilitation & Resettlement Plan has been submitted to the State Government. For 500 MW Hirong Hydro Power Project, CEA has accorded Techno-Economic Concurrence on 10th April, 2013. For the Environmental/Forest Clearance of the Project, the EIA & EMP Reports have been submitted to MoEF

iii) Prayagraj Power Generation Company Limited: It was acquired from Uttar Pradesh Power Corporation Limited through competitive bidding  process. It is implementing  1980  MW  (3x660  MW) Thermal Power Project (with permission to add two additional generation  units  of  660MW  each)  in  Tehsil  Bara  of  District Allahabad, Uttar Pradesh. Fuel Supply Agreement between PPGCL & Northern Coalfields Limited has been executed on 29th August, 2013, for Phase-I. All Statutory/Regulatory approvals required for the current stage of the Project are in place. Financial Closure has already been achieved and for the revised project costs, steps are being taken to fund the additional financial assistance. The supplies from BHEL for Boiler, Turbine and Generator for Phase-I of the Project are in progress. All major packages have been awarded. Supply of materials is in progress. The progress on the implementation of the Project is satisfactory.  An expenditure of approximately Rs.9372 crore has been incurred on the implementation of the Project upto 30th June, 2014.

iv) Sangam Power Generation Company Limited: It was  acquired from Uttar Pradesh Power Corporation Limited (UPPCL) through competitive bidding process, for the implementation of 1980 MW (3 x 660 MW) Thermal Power Project in Tehsil Karchana of District Allahabad, Uttar Pradesh. It executed Deed of Conveyance with Uttar Pradesh Power Corporation Limited (UPPCL) but the district administration could not hand over physical possession of land to the Company due to local villagers agitation. As such, no physical activity could be started on the ground.The company has written to UPPCL and all procurers that the Power Purchase Agreement is rendered void and cannot be enforced. As such, the Company’s claims be settled amicably for closing the agreement(s). Necessary supporting documents in support of the Company’s claim have been furnished to UPPCL which is under their review.

v) Jaypee Meghalaya Power Limited: It was incorporated by the Company  as  its  wholly-owned subsidiary  to  implement  two Hydro-electric  Projects  i.e.  270  MW  Umngot  H.E.P.  in  the Umngot River Basin and 450 MW Kynshi-II H.E.P. in the Kynshi River Basin both in Meghalaya  on BOOT (Build, Own, Operate and Transfer) basis. The Company along with its associates will ultimately hold 74% of the Equity of JMPL and the balance 26% will be held by the Government of Meghalaya. With respect to 450 MW Kynshi-II H.E.P., the field work of survey & investigation and EIA studies have already been completed. Drilling and drifting in Power house area have been completed. The revised proposal with involvement of lesser forest area has been submitted to the State Government and Ministry of Environment and Forest. The control levels i.e. FRL & TWL have been approved by the State Government. Approval of CEA has been accorded to the water availability series for power potential studies. With respect to 270 MW Umngot H.E.P, the State Government has advised that the project will not be operationalized as per MoA till further orders. The matter is being pursued with the State Government for permission to resume the works.

vi) Himachal Baspa Power Company Limited and Himachal Karcham Power Company Limited: These companies were incorporated as a sequel to the proposed transaction of divestment of Baspa-II & Karcham Wangtoo Hydro Power Projects.

With a view to  deleverage the Company’s Balance Sheet  and also to enhance Shareholders’ value, the Board in its meeting held on 1st March, 2014 approved a Scheme of Arrangement, subject to statutory and regulatory approvals and sanction of the Scheme by the relevant High Court, for hiving off 300 MW Baspa-II HEP and 1091 MW Karcham Wangtoo HEP to two separate wholly owned subsidiaries and eventual transfer of ownership of the said wholly owned  subsidiaries  to  a  consortium  led  by  TAQA  India  Power Ventures  Private  Limited  (TAQA).  However,  the  Company  has received a notice from TAQA in July, 2014 intimating their withdrawal from the said transaction as a result of a change in the business strategy and priorities of their group. With withdrawal of TAQA, the Acquisition Agreement dated 1st March, 2014 automatically stands terminated.  Further,  this  withdrawal  makes  TAQA  liable  to  make payment of break fee of US $ 9 million in terms of the said Agreement for which necessary notice has been issued to TAQA. Meanwhile, JSW Energy Limited said that it had agreed to buy 3 operating power plants from Jaiprakash Power Ventures Limited, as it looks to expand its portfolio beyond coal and lignite-based plants. The company in a statement said that JSW Energy, controlled by billionaire Mr Sajjan Jindal, will acquire two of Jaiprakash's three hydropower plants in Himachal Pradesh and a thermal power plant in Central India.According to the statement, the three plants together have a combined capacity of 1,891 MW. Mr Jindal said that the financial terms of the deal were still being worked out, but the deal was probably the largest in India's power sector to date. The Company  in  line  with  publically  stated  policy  of Jaypee Group, remains focused and committed on reduction of debt through sale of some of its assets, to deleverage its Balance Sheet and enhance Shareholders’ value.

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