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Singapore's Sembcorp to acquire Gayatri’s 45% stake in NCC Power

IBEF:  February 07, 2014

New Delhi: Singapore-based Sembcorp Industries has signed a conditional agreement to acquire 45 per cent stake in NCC Power Projects (NCCPP), which is currently building a 1,320 megawatt (MW) coal-fired power plant in Andhra Pradesh with an investment worth Rs 848 crores.

NCCPP is jointly owned by Gayatri Energy Ventures (GEVPL) and NCC Infrastructure Holdings (NCCIHL). Gayatri is Sembcorp’s project partner for another power plant in Nellore district of AP.

Once the deal is completed, Sembcorp will hold 45 per cent of NCCPP, while the remaining 55 per cent will be held by NCCIHL.

NCCPP’s upcoming plant is located on a site adjacent to Thermal Powertech Corporation India (TPCIL), Sembcorp’s first power plant investment in India.

The proximity of the two plants will enable Sembcorp to benefit from substantial synergies. The two plants will utilise the same infrastructure, such as that for coal importation and logistics. They will also be run by the same Sembcorp management team in Nellore.

The NCCPP project is expected to come on-stream in early 2016. The project will be fuelled by both domestic and imported coal. It has already received a Letter of Allocation (LoA) for its domestic coal supply from Coal India.

“With our first power project in India progressing well and on track for completion this year, we are now pleased to embark on our second power plant investment there. This acquisition will provide the opportunity for Sembcorp to increase our foothold in India’s power market, where we see opportunities for our business to grow significantly in the years to come,” said Mr Tang Kin Fei, President and CEO, Sembcorp Group.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.