Mumbai, July 27: Reliance Power Ltd, the Anil Ambani group company, has signed an agreement to acquire the hydroelectric power assets of Jaiprakash Associates Ltd (JAL) for an undisclosed amount.
“Reliance CleanGen Ltd (RCL) — a 100 per cent subsidiary of Reliance Power Ltd — and Jaiprakash Power Ventures Ltd (JPVL) — a subsidiary of JAL — today announced the signing of an exclusive memorandum of understanding, for the 100 per cent acquisition by RCL of the entire hydroelectric power assets of JPVL,” the company said in a statement today.
Jaiprakash Power Ventures’ hydroelectric power portfolio comprising three plants have an aggregate capacity of around 1,800 megawatt. It is the largest in the private sector in India and has an asset base of over Rs 10,000 crore.
The plants, with an asset life of over 50 years, uses the run-of-the-river technology to convert the flow of natural water into electricity, eliminating the need for a large reservoir.
Reliance Power said JAL would utilise the proceeds from the proposed transaction to reduce its outstanding debt and deleverage its consolidated balance sheet.
“The completion of the proposed transaction would make Reliance Power the largest provider of hydroelectric power in the private sector in India,” the statement added.
At present, Reliance Power has hydroelectric projects aggregating over 5,000MW under development. Of this, 4,200MW are located in Arunachal Pradesh, 700MW in Himachal Pradesh and 400MW in Uttarakhand.
SBI Capital Markets Ltd has been appointed as the transaction adviser.
The deal comes just two days after Abu Dhabi National Energy Company (TAQA) withdrew from a nearly Rs 10,000-crore transaction to acquire two of Jaiprakash’s hydel power projects. Under the deal, announced in March, TAQA was to acquire the Baspa II and Karcham Wangtoo projects in Himachal Pradesh.
Jaiprakash said TAQA was constrained to take the decision, following a change in their business strategy and priorities. TAQA will have to pay it a break-away fee.
Electricity distribution companies of states such as Gujarat and Maharashtra are likely to appeal against the sector tribunal’s order allowing power producers to recover increased imported fuel cost from March 2013.