'CLP is encouraged by power sector reforms'
— Rajiv Ranjan Mishra, Managing Director, CLP Power
India Pvt. Ltd
CLP Power India Private Ltd, a subsidiary of the
HK$38.5-billion China Light and Power Ltd, Hong Kong, is the largest foreign
investor in the Indian power sector. The company's strategy is to develop
a portfolio of investments across various segments of power industry and become
a significant player in the Indian electricity market, Rajiv Ranjan Mishra
tells Prashant C. Trikannad in this interview.
What is CLP Group's critical assessment of the Indian
power sector vis-à-vis reforms, power for all by 2012, new generation capacity,
transmission and distribution, tariff-based bidding, local competition, and
opportunities for foreign companies?
CLP has maintained its presence in India since early liberalisation in the
sector, and is the largest foreign investor in the Indian power sector. CLP
continues to remain encouraged by the reforms being undertaken in the power
sector and sees considerable opportunity for our business to grow in the
Power for all by 2012 will face considerable challenges nonetheless due to
reasons attributable to implementation of plans as well as India's growth, as
the demand for power will certainly grow at a pace faster than supply.
Competition within the Indian power sector has intensified with a number of
Indian players in the fray enhancing the competitiveness within the industry as
well as ensuring that this time around India can achieve its goals. Timely
completion of projects is the biggest challenge to meet the 11th and 12th plan
targets. Apart from a few areas in renewable energy, the opportunities for local
and foreign companies are the same.
What is CLP's outlook for India in years to come? What is the investment plan
for the current financial year?
The overall strategy for our Indian business is to develop a portfolio of
investments across various segments of power industry. We will ensure that the
growth of this business is consistent with our group's investment disciplines
and is consistent with our climate strategy.
In 2008, CLP will continue to focus on finding replacement gas supplies for the
existing GPEC plant and focus on timely completion of the 100.8-mw Samana and
82.4-mw Saundatti wind farms apart from continuing to evaluate potential
investment opportunities across the electricity sector chain in the country.
CLP is pursuing with HPGCL for issuance of letter of intent for development of
1,320-mw coal-fired project in Jhajjar, Haryana. Upon issuance of LoI,
construction activity will start.
Your 2007 Annual Report mentions a business strategy that involves the
development of generation projects, investments in renewable energy, bidding for
new transmission projects, acquiring selected distribution and retail businesses
and environment and community development? Can you elaborate on this strategy?
CLP's overall aim in India remains to grow beyond the present single-asset
portfolio, so that CLP becomes one of the significant players in the Indian
electricity market, including through alliances with suitable partners by
pursuing new projects in reforming states with strong state-owned utilities. CLP
proposes to achieve this by pursuing with development of:
u GPEC-II as soon as
viable long-term gas supplies are available;
u Greenfield conventional
power station projects whose economic and environmental characteristics meet our
u Privatised transmission
projects being bid out through tariff based processes;
u Distribution or retail
u Renewable energy
portfolio including through growth in wind projects as well as a move towards
other RE sources, such as hydro, biomass and solar energy.
Three out of the 10 ultra mega power projects have been awarded so far. Is
CLP keen to participate in taking up these projects?
Given the nature of risks that we foresee in implementing such large projects,
our current preference is to invest in mega projects in the 1,000-2,000 mw
Coming back to renewable energy, CLP Group is developing wind energy projects
in India. Does the group intend to take up solar power and other renewable
Certainly…while CLP continues to actively pursue investments in wind energy, we
are also evaluating the prospects of investing in solar, hydro, biomass and
other renewable energy projects. One of CLP's subsidiaries in Australia recently
acquired a 20 per cent stake in a solar equipment manufacturer, Solar Systems,
and CLP proposes to use this technology in India and review potential investment
opportunities in the sector.
What are your company's specific plans for renewable energy?
CLP is perhaps the largest foreign investor in India's renewable energy sector
having committed to invest in wind energy projects to the extent of 233 mw in
the states of Maharashtra (50.4 mw through our affiliate Roaring 40s), Gujarat
(100.8 mw) and Karnataka (82.4 mw). We are in the process of evaluating
potential opportunities in solar and biomass sectors as well, and are pretty
keen on investing in viable run-of-the-river hydropower projects.
In the long run, subject to availability of viable projects and favorable
government policy, CLP's plan is to develop a portfolio of about 1,000 mw of RE
What are the current and future plans of Gujarat Paguthan Energy Corporation
The current plans at GPEC include continuing to optimise the plant performance;
operating the plant efficiently with very high standards of health, safety and
environmental performance and focus on replacing the existing long-term gas
supply agreements for depleting supplies with new long-term agreements. CLP
proposes to proceed with the development of GPEC-II as soon as viable long-term
gas supply agreements are put in place.
What is the current status of the 100.8-mw wind project at Samana, Gujarat,
and the 82.4-mw greenfield Saundatti wind project in Karnataka?
The construction of the Samana project has commenced and the project is expected
to be commissioned in two phases during FY 2008-09. The Saundatti project is in
the process of procuring development clearances. Construction is likely to
commence in the fourth quarter of 2008 and the project is expected to be
commissioned by the second quarter of 2009.
What is the progress in the 1,320-mw project at Jhajjar?
CLP recently emerged the lowest priced bidder in the competitive tariff-based
bid process run by HPGCL in Haryana. We are now awaiting the receipt of letter
of intent from the Haryana government. On completion, the 1,320-mw project is
expected to be the cleanest coal-fired thermal power station in the region,
incorporating advanced environment protection measures.
What are CLP’s plans under clean development mechanism?
CLP recently launched Carbon Ventures which, among other things, will also act
as the aggregator of CERs and is expected to take trading position in this
market. CLP-owned renewable energy projects in India and China will be eligible
for registration under CDM and will be the captive generators of CERs. CLP will
also source CERs from the market thatmay either be sold or reserved for captive
use, depending on Stage II of Kyoto (beyond 2012).
[May 19-25, 2008]