Lanco plans power plants in Bangladesh, Indonesia

Lanco Infratech, construction and energy conglomerate, is looking to build thermal power projects overseas, even as it has dropped plans to bid for Australian miner Premier Coal.

The company has zeroed in on power projects in Bangladesh, Indonesia and Middle East.

“We have already bid for two power projects of 660 mw each in Bangladesh and we plan to bid for three plants in Indonesia over the next six months. After this, we are also targeting some projects in the Middle East,” said L Madhusudhan Rao, executive chairman, Lanco Infratech.

Lanco has a portfolio of 3,300 mw of operational power producing capacity in India, which it plans to raise to 15,000 mw by 2015.
It is looking to invest Rs32,250 crore to develop 6,000 mw of identified projects while ramping up its employee base to 20,000 people by 2015 from the present 7,000.

It has achieved financial closure for half of the planned 12000 mw capacity addition, while funds tie-up for the rest would be achieved in 2-3 months, Rao said.

The company also plans to list its power arm over the next two years. However, Rao said, the company will not list the power arm to fund its expansion, as it has a good cash flow and reserves from internal resources. “We want to bring clarity in our auditing system of different verticals for which a separate listing would be required.”

Lanco recently acquired a coal asset in Australia - Griffin — from which it would produce 4 million tonne coal annually for its power plants in the country.

On sourcing of coal from Indonesia, Rao said, “The cost of procuring coal from Indonesia has gone up from $59 per tonne to almost $120 per tonne. We source coal for our Udupi plant in Karnataka from Indonesia and our cost of producing power for that plant is likely to increase by `1 per unit.”

On Premier Coal bid, Rao said, “We were not too clear about the rules on monopoly in that region. Griffin and Premier are the only two coal mines in that part of Australia and we already own one.”

Lanco would focus on developing Griffin and is still looking for acquisition opportunities in Australia, Indonesia and South Africa, Rao said. Lanco acquired Australia’s Griffin for $760 million in December last.

Power plant equipment manufacturing is an area Lanco is looking at, but has not taken a final decision yet, Rao said.

Meanwhile, Lanco’s capacity utilisation at a 740 mw plant in Andhra Pradesh has been hit by lower gas availability, falling to
75-80% from 90% earlier, managing director G Venkatesh Babu said. (With Reuters)