Reliance Power to acquire Jaiprakash’s hydro power business in India

India-based Reliance Power has signed a memorandum of understanding (MoU) to completely acquire the hydroelectric power portfolio of Jaiprakash Power Ventures (JPVL).

Worth more than $1.6bn, the successful acquisition of three operating plants with an aggregate capacity of nearly 1,800MW would make Reliance Power one of the largest hydroelectric power providers in the private sector in India by next year with an operating capacity of 7,800MW.

With an asset life of more than 50 years, JPVL’s power facilities deploy run-of-the-river technology to convert natural water flow to electricity, getting rid of the requirement for a large reservoir.

JPVL operates a 300MW Baspa stage two facility in Kinnaur, Himachal Pradesh; a 400MW Vishnuprayagn plant Chamoli District, Uttarakhand and 1091MW Karcham Wangtoo plant in Himachal Pradesh.

Besides the assets being mulled over for acquisition under the proposed transaction, Reliance Power’s 12 hydroelectric power projects aggregate to more than 5,000MW currently under development, of which 4,200MW are situated in Arunachal Pradesh; 700MW in Himachal Pradesh and 400MW in Uttarakhand.

Proceeds of the proposed transaction would be used to reduce JP Associates’ outstanding debt, and thus deleveraging its consolidated Balance Sheet.

Upon the completion of the latest transaction, JP Ventures will have only operating coal-based capacity of 500MW until the commissioning of its the first 600MW of Nigrie Super Thermal Power Project (1,320 MW) next month.

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