NTPC plans to infuse $6 billion to boost capacity
The money borrowed from PSU banks could increase capacity by over 14,000 MW
|Arup Roy Choudhury
Power sector giant National Thermal Power Corporation (NTPC) plans to double its capital expenditure to $6 billion in the next financial year to speed up work on its 15 ongoing projects that could add 14,748 megawatts (MW) of electricity to a power-starved country.
The company is also looking to acquire coal mines abroad to fuel its power utilities, 85 percent of which run on coal.
Addressing the annual press conference, Chairman and Managing Director of the public sector Maharatna company Arup Roy Choudhury said, “Our capacity addition target is doubling. Naturally the capex would also double.” The power sector behemoth plans to fund its capital expenditure through raising loans from public sector banks. It has already tied up with banks for loans worth Rs 200 billion.
Choudhury said NTPC had added 2,490 MW in the last financial year, taking its total installed capacity to 34,194 MW. The company also recorded the highest-ever generation of power of 220.54 billion units in 2010-11.
Choudhury said India faces a peak-hour power shortage of nearly 14 percent, and utility companies are expanding capacity to satisfy a rapidly urbanising population and rising industrialisation.
NTPC has set a daunting target of reducing its peak power deficit by half in the next two years and adding 1,00,000 MW capacity during 2012-17, but it is besieged with delays due to land acquisition, environmental concerns and the issues of coal linkages.
The company is looking to acquire coal mines from Australia, Indonesia, South Africa and Mozambique. “We are doing due diligence on four proposals for mines in Indonesia and Australia," Choudhury said. NTPC has already arranged for its coal requirements for the next two years.
India holds 10 percent of the world's coal reserves, but the shortfall from local supplies has grown rapidly with the increase in the number of coal-powered power plants. The country is also estimated to have imported 137 million tonnes of coal in FY11.
The state-owned power generation utility suffered the consequences of the weak health of its direct consumers, which are the state electricity boards, in the just concluded financial year.
As a result, the company's net profit, pegged at Rs 88.26 billion, for the year is only 1.1 percent higher than the FY10 figure. “There was a loss of 13.2 billion units of power that did not get sold despite being produced. This is because state electricity boards are in poor financial health,” Choudhury added.
The Plant Load Factor (PLF) for NTPC for the year fell to 88.3 percent from 90.81 percent. PLF defines the capacity at which a plant operates in relation to its maximum capacity.
Samiran Saha is Assistant Editor, Business with Tehelka.