Reliance Energy Ltd plans to invest Rs 60,000 crore to add 15,000 MW of power over the next five years. This will boost the company’s generation capacity almost 17 times from 941 mw now.
Investment to add 15,000 MW to company’s capacity
MUMBAI: Reliance Energy Ltd (REL) plans to invest Rs 60,000 crore to add 15,000 MW of power over the next five years. This will boost the company’s generation capacity almost 17 times from 941 mw now.
Addressing shareholders at the annual general meeting on Tuesday, REL chairman Anil Ambani said: “Our journey has barely begun.”
The government has a target to expand capacity by 65,000 mw to 1,93,000 mw by 2012. India needs to spend $149 billion to boost power generation and upgrade transmission and distribution networks.
Ambani didn’t say how he plans to fund the expansion. On July 3, Ambani had said he could raise Rs 1 lakh crore to invest in his energy, telecommunications and finance group to tap opportunities in the world’s second-fastest growing economy.
REL plans to invest an additional Rs 12,000 crore in building nuclear power capacity, once rules are changed to allow non-state-run companies get into the business, Ambani said. REL plans to install 2,000 mw of nuclear power capacity, he said.
Ambani said REL will bid for at least two of the nine ultra mega power projects (UMPPs) that the government is planning. These projects, with an aggregate capacity of 36,000 MW, would require an investment of Rs 1, 50,000 crore.
“We target to bag at least two of these projects, with an investment outlay of nearly Rs 40,000 crore,” he said.
Last year, REL participated in both the Sasan and Mundra projects in Madhya Pradesh and Gujarat, respectively.
This year, the government plans to place two more UMPPs for competitive bidding. They are the imported coal-based Krishnapatnam project in Andhra Pradesh, and the pithead-based Tilaiya project in Jharkhand.
“Reliance Energy has been pre-qualified for the final bid for Krishnapatnam and has submitted the request for qualification for Tilalaiya,” Ambani said.
The company has made an aggregate investment of over Rs 25,000 crore in the Rosa and Dadri projects in Uttar Pradesh.
The proposed Dhirubhai Ambani Energy City at Dadri will be the world’s largest gas-based project in a single location. The project is to be developed in phases, and has already received all major statutory clearances.
REL already possesses over 2,100 acres of land for the project. The project will be set up in two phases. Phase- I of the project envisages capacity addition of 5,600 MW, with an investment outlay of Rs 15,400 crore.
The two power projects will help meet the shortfall of over 2,000 mw that currently exists in UP and will also help in narrowing the deficit of over 5,000 mw that exists across the northern region.
The company has also emerged as a preferred bidder for six hydro projects in Arunachal Pradesh, with a capacity of over 3,000 MW, at an expected cost of Rs 18,000 crore.
In the engineering, procurement and construction (EPC) business, the company’s order book currently stands at Rs 5,500 crore, up from Rs 3,350 crore, as on March 31, 2006, an increase of over 60% .
“The EPC group has doubled its share in our total income over the past year and now contributes a third or 32% of our aggregate revenues. We will bid for EPC projects worth more than Rs 20,000 crore over the course of this year,” said Ambani.
In Delhi, the company has finally made some progress, the chairman said. Its distribution businesses have managed to reduce the aggregate technical and commercial (AT&C) losses for BSES Rajdhani Power Ltd (BRPL) from over 51% to 30%, while the losses for BSES Yamuna Power Ltd. (BYPL) declined from over 63% to less than 40%.
“Our transmission and distribution losses are the lowest in the country at less than 12%, as compared to the national average of over 30%. Our Mumbai distribution business continues to operate at 99.9% reliability,” he said.
REL is in discussion with the government of Maharashtra for the expansion of the Dahanu plant to generate an additional 500MW of power, which can be distributed in the power-deficient Mumbai.
The company is awaiting environmental clearance, which is the only licence that’s pending to be secured before it rolls out the project.
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