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Malaysian firm weighs Indian power plant investment
By siliconindia
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Monday, 11 October 2004, 19:30 IST
SINGAPORE: Malaysian engineering and energy firm Ranhill Bhd will decide whether or not to invest in a $1 billion Indian power project after it finalises due diligence this month, a source close to the plan said on Monday.
If a deal is reached, Ranhill would invest $192 million as 30 per cent of the project would be funded by equity and 70 per cent by debts from Indian banks, said the source.
Ranhill has been diversifying into overseas markets to offset a decreasing number of infrastructure projects in Malaysia, which aims to curb spending and balance the country's budget by 2006.
Ranhill "is still waiting for the due diligence report. It should be concluded by this month," the source told Reuters. "It needs to see the commercial viability and also the returns on the project."
In August, Ranhill signed a conditional agreement to acquire a 64 per cent stake in an Indian power firm, Nagarjuna Power Corp Ltd, which is building a 1,015-megawatt coal-fired power plant in Karnataka.
Nagarjuna Fertilizer and Chemical Ltd would have the remaining 36 per cent interest in the project, which would make Nagarjuna Power the largest private-sector power producer in Karnataka.
India's power demand is growing on the back of a robust economy. The country needs $665 billion to double its generation capacity to 200,000 megawatts by 2012, the International Energy Agency says.