JSW Energy to acquire 1,397MW hydropower assets in India for $1.57bn

16 November 2014 (Last Updated November 16th, 2014 18:30)

JSW Energy will acquire two hydropower projects in Himachal Pradesh, India, for Rs97bn ($1.57bn) from Jaiprakash Power Ventures, part of the Jaypee Group.

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JSW Energy will acquire two hydropower projects in Himachal Pradesh, India, for Rs97bn ($1.57bn) from Jaiprakash Power Ventures, part of the Jaypee Group.

The two projects have a combined generation capacity of 1,397MW.

Talking about the developments, a spokesperson for JSW Energy said: "JSW Energy has agreed to acquire from Jaiprakash Power Ventures and other shareholders, 100% stake in Himachal Baspa Power company for a base enterprise value of Rs9.7bn."

The 300MW Baspa II project and the 1,091MW Karcham Wangtoo project will both generate hydroelectricity. They will be moved into a separate company, which will be called Himachal Baspa Power company.

The acquisition will turn JSW into the largest hydropower generator in private sector in India, with a combined installed capacity of 4,531MW.

"The acquisition will yield immediate cash flow and is expected to enhance JSW Energy’s consolidated profitability and returns and create significant synergies."

JSW stated: "The acquisition will yield immediate cash-flow and is expected to enhance JSW Energy’s consolidated profitability and returns and create significant synergies."

JSW CMD Sajjan Jindal was quoted by PTI as saying: "Our strategy is to increase capacity manifold and create synergies through a mix of organic and inorganic opportunities, supported by excellence in operations to accelerate the growth in shareholder value."

The deal expands JSW’s operations from coal and lignite based plants to hydroelectricity.

Debts and low profitability are the main reasons that prompted Jaiprakash Power Ventures to sell of the asset, reports Reuters.


Image: Japyee Group is developing Sardar Sarovar Dam on the River Narmada, India. Photo: courtesy of AceFighter19.

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