The Anil Ambani-led Reliance Power has decided to sell three coal mines in Indonesia and concentrate on coal mining business in the country to support Prime Minister Narendra Modi’s initiative of ‘Make in India’.
“India has ambitious plans of doubling its coal production from 450 million tonnes to 900 million tonnes. We have also decided to exit the coal business in Indonesia and we hope to complete transactions (in this regard) in the course of this year,” Ambani told shareholders at the company’s 21st annual general meeting today.
He said the company will be focusing on coal mining business and coal resources business in India.
In 2008, the company through its subsidiary Reliance Coal Resources (RCRPL) had acquired 100 per cent in three coal mines in Indonesia with total reserves of two billion metric tonnes.
RCRPL had acquired Srivijaya Bintangtiga Energy, Bryayan Bintangtiga Energy and Sugico Pendragon Energy in South Sumatra of Indonesia spread over 40,000 hectares.
R-Power currently has only two coal mines which are located in Sasan in Madhya Pradesh — Moher and Moher captive coal block for its 3960 mw Ultra Mega Power Project (UMPP) with a total reserve of 20 million tonnes.
The coal ministry through a notification on May 7 this year had cancelled the allocation of Chhatrasal coal block for the Sasan UMPP.
“The government has cancelled the allocation of Chhatrasal block. But we have now challenged this decision in the Delhi High Court and the matter is sub-judice. Similarly, the 3,960-mw Krishnapatnam UMPP in Andhra Pradesh is under litigation, post changes in regulations in Indonesia,” Ambani said.
R-Power has also backed out from the 4,000 MW Tilaiya UMPP citing delay in land acquisition.
He further said the company has signed an MoU with the Bangladesh government for setting up 3,000 MW gas-based project and has proposed to relocate equipment from the 2,250-mw Samalkot project in Andhra Pradesh to Bangladesh.
“Our Samalkot project is linked with gas supply. India is facing tremendous shortage of gas. Nearly, 25,000 mw of gas based plants with investment of over Rs 1 lakh crore are sitting idle for want of gas.
“Gas is a national asset whether it is public sector or private sector and India is short of energy and we do not have gas,” he said.
“To fire this 25,000 mw, we need nearly 100 million cubic metre of gas, so we are far away from those targets. Therefore, we have taken a strategic decision to relocate our Samalkot facilities to Bangladesh for which we have signed an MoU. There is a huge shortage of power in Bangladesh and we hope that it will be an ultimate solution for us,” he added.
R-Power will use the equipment it had contracted for its Samalkot project in Andhra Pradesh for setting up the power plant in Bangladesh in three years from the date of signing the power purchase agreement (PPA).
Ambani further said the company has completed phase-I of its Rs 50,000 crore capital expenditure programme and now has 6,000 mw operating capacity.
“All our plants including 3,960-mw Sasan and 1200-mw Rosa in Uttar Pradesh are operating at PLFs of nearly 90-100 per cent compared with the national average of 65 per cent,” Ambani said.
“We are committed to profitable and sustainable growth while remaining financially conservative,” he added.
Speaking about renewable energy plans of the company, Ambani said R-Power has already signed an MoU with the Rajasthan government for setting up 6,000 mw of solar capacity and solar parks and will be also participating in the upcoming solar auction in various states.