4th Jul 2008 09:25
This replaces the announcement for Greenko Group PLC issued today at 07:00 under RNS No 3124Y
In the second paragraph, the figure 146.5 MW was previously incorrectly shown as 46.5 MW
All other details remain unchanged
Greenko Group plc
Acquisition of new concessions
Greenko Group plc ("Greenko" or the "Company") is pleased to announce that it recently signed a legally
binding contract to acquire four new concessions: the Sonna 10.5 MW, Kallur 16 MW and Joladadagi 16
MW hydro schemes, all on the Bhima river in north east Karnataka and the Dinnekere 2 MW hydro
scheme in south west Karnataka.
The new assets will increase Greenko's total projects under development from 102 MW in April 2008 to
146.5 MW, which in addition to the Company's existing 90.5 MW of secured installed capacity, gives the
Company a total of 237 MW of assets. Once those projects under development are operational, it is
anticipated that the total portfolio will generate over 800,000 tonnes/annum of Certified Emission
Reduction units (CERs).
These latest additions are an important step forward in positioning Greenko as a leader in the sustainable
renewable asset class within India with attractive returns above those of a normal utility operator.
The details of the concessions are as follows:
Sonna Mini Hydro Scheme
Greenko has agreed to acquire the Sonna Mini 10.5 MW hydro scheme on the Bhima River in
Karnataka, which is currently under construction. Project work is already at an advanced stage, and it is
anticipated that the project will be commissioned in the first quarter of 2009. It is expected that the
project will generate 23,500 tonnes of CERs per annum.
The plant will sell electricity to the Karnataka State grid under a long term Power Purchase Agreement
with Hubli ESCOM.
Kallur, Joladadagi and Dinnekere Mini Hydro Schemes
Greenko has agreed to acquire licences to develop a further three hydro concessions. The Kallur
and Jolladadagi Mini Hydro schemes are both 16 MW concessions on the Bhima river in Karnataka. It is
expected that each project will generate 31,396 tonnes of CERs per annum. Greenko also acquired a
licence to develop a 2 MW scheme at Dinnekere in south west Karnataka and a detailed project report is
now under preparation. Project work is expected to conclude following the financial closure on these
agreements in 6 weeks and it is planned that the assets will be commissioned by the second quarter
of 2010.
It is anticipated that the electricity from these three assets will be sold at premium prices either through an
agreement with power trading companies or direct to industrial end users.
Summary
These new concessions, with their relatively short construction times, fit into Greeko's strategy of aiming to
capture the value of premium power prices which are forecast to last until 2017, due to deficits in
electricity supply. The 44.5MW of new concessions will be developed through a capital expenditure
of approximately €36 million with a targeted debt equity ratio of 75:25.
Commenting on these new concessions, Anil Chalamalasetty, CEO and co-founder of Greenko,
said:
'These new concessions are excellent additions to Greenko's portfolio of premium, run of the river, small
hydro schemes. By acquiring both assets that are already under construction, as in the case of the
Sonna scheme, and those concessions where licences have already been granted, we can substantially
reduce development time and capture the current premium price levels through sales to power trading
companies and direct sales to industrial end users.'
Enquiries:
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Greenko Group plc
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Anil Chalamalasetty
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+91 (0)98 4964 3333
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Mahesh Kolli
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+44 (0)7767 692729
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Tim Bowen
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+44 (0)7973 668818
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Arden Partners plc
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Christopher Hardie
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+44 (0)20 7398 1600
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Adrian Trimmings
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Cardew Group
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Rupert Pittman
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+44 (0)20 7930 0777
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Jamie Milton
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Catherine Maitland
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NOTES TO EDITORS
Background
Greenko intends to become a leading owner and operator of clean energy projects in India. The business was developed over an 18 month period prior to incorporation by Anil Chalamalasetty and Mahesh Kolli who incorporated the business at the time of its initial fundraising in January 2006. Greenko currently has 90.5 MW contracted capacity of clean energy assets including six biomass and two hydro plants and 146.5 MW of concessions under development including three biomass and seven hydro plants. The Indian renewable energy sector is a relatively young and fragmented market within which Greenko is focused on developing a portfolio of biomass, hydro and wind assets. The Company intends to increase the installed capacity it operates through a combination of purchasing both existing assets and projects under construction, as well as the winning of concessions to develop new greenfield assets. Greenko intends to be a consolidator within this sector and the Directors believe that operational and financial benefits will flow from this strategy.
The Group's income is generated from receipts for power sold to state electricity boards and from sale of high margin carbon credits or Certified Emission Reduction units ("CERs") generated from the Group's registered clean energy projects. In the future, the Directors believe that new opportunities, such as the direct sale of electricity to large scale users and sales of CERs in the voluntary market, will broaden the income streams of the Group as well as enhance profitability.
The Indian economy
India has a population of approximately 1.1 billion people, which is currently growing at 1.5 per cent. per annum, making it one of the largest populations in the world. The average age of the population is 24, providing a growing, well educated workforce. The Indian economy has benefited from low inflation and recent liberalisation has encouraged strong international investment which has helped to promote strong economic growth particularly in the past five years. The growth in industrial production and GDP per capita has resulted in a strong increase in demand for electricity. This has led to a shortfall in supply, resulting in both brown-outs (where the voltage level drops below the normal minimum level specified for the system, therefore particularly damaging to electric motors) and black-outs. In addition, the 2001 Indian Census reported that 44 per cent. of households did not have access to electricity. Due to population growth since 2001 and the existing electricity infrastructure, the Directors believe this may have increased perhaps to as much as 60 per cent. or over 600 million people.
Related Shares:
GKO.L