JSW Energy to Acquire KSK Mahanadi Power, Brownfield Expansion Planned
JSW Energy Ltd. has been declared as the successful applicant for acquisition of KSK Mahanadi Power Company Ltd. (KMPCL) with its bid of Rs. 15,985 crore. KSK Mahanadi Power Co. has a 3.6 GW thermal power plant in Chhattisgarh (including under construction).
As of now, JSW Energy has received Letter of Intent (LoI) from the Resolution Professional for its resolution plan for KMPCL.
Specifics of KMPCL’s Power Plant in Chhattisgarh
KSK Mahanadi Power Co.’s thermal plant in Chhattisgarh has an operational capacity of 1.8 GW (3 units of 600 MW each). The company has long-term and medium-term Power Purchase Agreements (PPAs) in place for 95% of power generated from these three units. Apart from this, 1.8 GW of thermal power generation capacity (3 units of 600 MW each), are under construction, thereby taking KMPCL’s thermal plant assets to 3.6 GW in total. Out of these three units, work on one of the units is 40% complete, whereas Balance of Plant (BoP) works for the remaining two units have been executed.
Importantly, JSW Energy will be completeing the remaining work on KMPCL’s plant to take its operational genertion to 3.6 GW.
JSW Energy to Finish Work on KMPCL’s Plant at 30-40% Lower Cost
While speaking to NDTV Profit about this acquisition, Mr. Sharad Mahendra, JSW Energy’s Joint Managing Director and Chief Executive Officer, said that the company targets to finish the remaining work on KMPCL’s thermal plant in a cost effective manner. He shared that JSW Energy targets to spend 30-40% lesser than the standard industrial cost of developing a greenfield thermal plant of the same capacity.
He mentioned that one of the reasons that this acquisition is advantageous to JSW Energy is the extent of work which has been executed on the 3 upcoming units at KMPCL’s plant.
“The balance of the plant is fully ready. Water pipeline for the entire 3,600 MW facility, the transmission line power evacuation—all those things are ready”, explained Mr. Mahendra. He added that KMPCL’s plant’s augmented capacity is expected to be commissioned in a period of 18 to 24 months.
Acquisition In-Line with JSW Energy’s 2030 Target of 20 GW Generation Capacity
JSW Energy has set a target to achieve 20 GW operational power generation capacity by 2030 from the current 7.9 GW. After the acquisition of KSK Mahanadi Power Co. along with the completion of work at KMPCL’s plant is completed, JSW Energy’s generation capacity will reach 11.5 GW. Therefore, this strategic acquisition will bring JSW Energy closer to attaining its 2030 target.
Brief Background of KSK Mahanadi Power Company’s Acquisition
KSK Mahanadi Power Co. was admitted into NCLT in 2019 for bankruptcy. Media reports site inadequate Coal supply as a reason for financial pressure on KMPCL despite having PPAs in place with UP, Andhra Pradesh and Tamil Nadu. This forced KMPCL to rely on Coal imports for power generation.
JSW Energy and Adani Power were among those in the fray to acquire KMPCL. In October 2024, Adani Power’s bid fell short of JSW Energy’s bid by Rs. 100 crore, thereby making JSW Energy the highest bidder. Both these companies had proposed 26% equity stake in KMPCL to various lenders, and Rs. 100 crore to operational creditors.
About JSW Energy Ltd.: Mumbai-headquartered JSW Energy Ltd. is a part of the JSW Group, and deals in power generation, transmission and trading. The company’s portfolio comprises hydro, thermal and Renewable Energy generation facilities across several states in India. For the Financial Year 2023-24, the company’s revenue from operations stood at Rs. 11,485.91 crore.
