Essar Power's 1,200 mw Mahan plant that was stranded for the past 17 months started generating power last month.
Essar Power expects to swing back to black in the current fiscal on the back of lower coal prices in the international market and operationalisation of its stranded plants.
The Ruia’s promoted firm has been reporting losses for at least three fiscals.
“We will be in profit in 2016-17. There was a minor loss in 2015-16 while company’s loss was over Rs 1,000 crore in 2014-15,” Essar Power’s Executive Vice Chairman Sushil Maroo told reporters here.
Elaborating, Maroo said operationalisation of its stranded plants like Mahan in Madhya Pradesh and slump in coal prices in international markets will help the company earn profits during the current fiscal.
Essar Power’s 1,200 mw Mahan plant that was stranded for the past 17 months started generating power last month.
At present, it is generating 300 mw, which will be further increased to 600 mw in the next few months. The company has tied up for coal to generate power as the Mahan coal block for the project was cancelled earlier.
Essar Power Gujarat Ltd (EPGL), which owns and operates a 1,200 mw imported coal fired thermal power plant at Salaya in Gujarat meets 9 per cent of the Gujarat’s overall power demand.
The net profit of Salaya plant is around Rs 35 crore in 2015-16 compared with a loss of Rs 684 crore in 2014-15. This turnaround in performance is attributed to higher operational efficiency, a reduction in coal prices through e-auction based procurement and normative plant availability.
Maroo said Essar Power’s overall plant load factor or proportion of capacity utilisation will increase to 80 per cent in this fiscal from 51 per cent recorded in 2015-16, which will increase its revenues and profits eventually.
Asked whether low gas prices will make gas based power generation more competitive in the country, he said: “Coal based thermal power will remain cheaper than gas based power at present when gas price have come down to USD 5 mmbtu.”
About the firm’s debt, he informed that the company has an overall debt of Rs 20,000 crore with debt equity ratio of 70:30 per cent.
Essar Power Ltd is one of India’s top five private sector power producers with over 20 years operating track record. It owns power plants in India and Canada with a total generation capacity of 6,100 mw, of which 4,675 mw is operational.
Of the total operational capacity, 3,075 mw is coal-based, while the remaining 1,600 mw is gas-based.
The operating plants in India are at Mahan, Hazira, Salaya and Vadinar. A 1,200 mw plant at Tori in Jharkhand is under development which will be completed in next two and half year.