27th Mar 2008 07:01
Greenko Group plc27 March 2008 Greenko Group plc Trading Update Greenko Group plc ("Greenko" or the "Group"), the Indian renewable energy ownerand operator, is pleased to provide an update on its activities since its AIMIPO in November 2007. Existing projects Within our existing operations, Greenko's six biomass plants are trading in linewith expectations. The transfer of banking arrangements for the ISA and Ecofren biomass plants, forwhich Greenko signed acquisition agreements in September 2007, has now beenfinalised. The Ravi Kiran biomass plant, which was 50 per cent. owned by Greenkoat the time of its IPO, became 100 per cent. owned by Greenko with effect from 1January 2008 with the transfer of banking arrangements expected to be completeby 31 March 2008. Greenko's two hydro-electric projects, AMR and Rithwik, which have a combinedinstalled capacity of 49 MW, remain on track to commence operations in time tostart generating revenues from the 2008 monsoon season. CER market The market price for Certified Emission Reduction units ("CERs") has risen abovethe €12 per unit which analysts forecast at the time of the Group's IPO inNovember 2007 and currently CER sales are being recorded at approximately €15per unit. In addition, Greenko is currently in the process of monetising itsstock of Verified Emission Reduction units ("VERs") which would represent anadditional income stream. The United Nations Foundation has chosen to buy CERs from Greenko's Sri Balajibiomass plant in Andhra Pradesh to offset the recent climate change meetinghosted by the United Nations General Assembly. The Sri Balaji project is a CleanDevelopment Mechanism ("CDM") project, which has been validated and verifiedunder the Kyoto Protocol, and the use of its CERs by the UN Foundation is animportant recognition of the quality of Greenko's operations. Direct Power Sales Greenko has been awarded an interstate power trading licence from the CentralElectricity Regulatory Commission to trade power produced by its generatingstations and other assets. The power trading licence will enable Greenko to fasttrack the launch of green power products and direct energy sales to industrialcustomers and is an important step forward in a rapidly evolving and dynamicenergy market in which Greenko intends to become a sector leader. India's first power exchange has also been launched, providing an alternativeplatform for the sale of power in a free market mechanism. This exchange haswitnessed initial trades at prices close to European peak rates andsignificantly above the Power Purchase Agreement prices of current Greenkoassets. Anil Chalamalasetty, CEO and co-founder of Greenko, commented: "We are pleased to report that our plants are trading in line with expectations,and we are also delighted that, in choosing to work with us, the UN Foundationhas recognised the high quality of our clean energy projects. We continue to make good progress in expanding our portfolio of biomass, hydroand wind assets within India and intend to issue a further update after thefinancial year end, which will update investors on the additional capacity beingadded." Enquiries: Greenko Group plcAnil Chalamalasetty +91 (0)98 4964 3333Mahesh Kolli +44 (0)7767 692729Tim Bowen +44 (0)7973 668818 Arden Partners plcChristopher Hardie +44 (0)20 7398 1600Adrian Trimmings Cardew GroupRupert Pittman +44 (0)20 7930 0777Jamie MiltonCatherine Maitland NOTES TO EDITORS Background Greenko intends to become a leading owner and operator of clean energy projectsin India. The business was developed over an 18 month period prior toincorporation by Anil Chalamalasetty and Mahesh Kolli who incorporated thebusiness at the time of its initial fundraising in January 2006. Greenkocurrently has 90.5 MW contracted capacity of clean energy assets including 6biomass and two hydro-electric plants. The Company is focused on developing aportfolio of biomass, hydro-electric and wind assets within India and intends toincrease the installed capacity it operates through a combination of purchasingboth existing assets and projects under construction, as well as the winning ofconcessions to develop new greenfield assets. The Indian renewable energy sector is a relatively young and fragmented market.The new projects are likely to take the form of the acquisition of existingassets under construction and the building of new plants on greenfield sites.Greenko intends to be a consolidator within this sector. The Directors believethat operational and financial benefits will flow from this strategy. The Group's income is generated from receipts for power sold to stateelectricity boards and from sale of high margin carbon credits or CertifiedEmission Reduction units ("CERs") generated from the Group's registered cleanenergy 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 inthe voluntary market, will broaden the income streams of the Group as well asenhance profitability. The Indian economy India has a population of approximately 1.1 billion people, which is currentlygrowing at 1.5 per cent. per annum, making it one of the largest populations inthe world. The average age of the population is 24, providing a growing, welleducated workforce. The Indian economy has benefited from low inflation andrecent liberalisation has encouraged strong international investment which hashelped to promote strong economic growth particularly in the past five years.The growth in industrial production and GDP per capita has resulted in a strongincrease in demand for electricity. This has led to a shortfall in supply ofsupply, resulting in both brown-outs (where the voltage level drops below thenormal minimum level specified for the system, therefore particularly damagingto electric motors) and black-outs. In addition, the 2001 Indian Census reportedthat 44 per cent. of households did not have access to electricity. Due topopulation growth since 2001 and the existing electricity infrastructure, theDirectors believe this may have increased perhaps to as much as 60 per cent. orover 600 million people. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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