Interim Management Statement

RNS Number : 0343Y
KSK Power Ventur PLC
15 February 2013
 



 

15 Feb 2013

 

KSK Power Ventur plc

("KSKPV" or the "Company")

 Interim Management Statement

 

 

KSK Power Ventur plc ("KSKPV" or "the Company"), the power project company listed on the London Stock Exchange, with interests in multiple power plants and businesses across India, today issues its Interim Management Statement for the period from 1 October 2012 to the date of this announcement. References to "the Group" are to KSKPV and its subsidiary companies.

The period has continued to be challenging for the entire power sector in India due to continued government inaction. KSKPV has however persisted with its efforts to address all issues and challenges and is confident of positive outcomes. During the period the Group has witnessed certain significant milestones in the construction of the KSK Mahanadi Power Plant which are detailed below. Also management is pleased to report progress with all other operational assets achieving good generation levels.

 

Operational developments in the power plants include:

 

During the four months, all the operational power plants recorded Plant Load Factor (PLF) in excess of 70% and two amongst these power plants achieved PLF in excess of 85% level. We anticipate this sustained generation to continue to the end of the financial year and progress ahead in the subsequent years, therefore becoming the cornerstone of operational cash flows before the additional cash flows from 3.6 GW KSK Mahanadi actually start to come through.

 

540 MW WARDHA POWER COMPANY LIMITED (WPCL):

 

The total gross power generated in the plant during the last four months stood at 1137.92 MU with an average PLF of 71.33%. The Company has been successful in obtaining necessary regulatory approval and negotiating refinancing covering more than half of the existing Rupee debt of this power project through an External Commercial Borrowing arrangement in US Dollar terms. This is expected to result in interest savings starting April 2013.

Sufficient coal supplies are currently being delivered and utilised, with a blend of linkage coal as well as alternate coal.  However, the thermal quality of the supply has been lower than contractually guaranteed levels and the Company has been in discussions with Western Coal Fields, the coal supplier to pursue remedial action.

 

135 MW VS LIGNITE POWER PRIVATE LIMITED (VSLP):

 

The total gross power generated in the plant during the last four months stood at 289.40 MU with an average PLF of 72.82%. Having regard to the power outage during the period under review, it is anticipated that the generation during February and March 2013 will be sufficient to ensure annualised PLF reaching 78% levels as anticipated for the full year.

 

86 MW ARASMETA CAPTIVE POWER COMPANY PRIVATE LIMITED (ACPCPL):

 

The total gross power generation for the last four months is at 180.80 MU with an average PLF of 71.16%. It is anticipated that with increased off take by the customer as well as supplies of the balance power to the local utility, the full year PLF will exceed 75% levels.

 

58 MW SAI REGENCY POWER CORPORATION PRIVATE LIMITED (SRPCPL):

 

The total power generation for the last four months is at 143.53 MU with an average PLF of 83.83% in the combined cycle gas based power plant. Power continued to be supplied to captive consumers against the committed long term Power Delivery Agreements, as well as to utilities and third party consumers on a shorter term basis.

 

43 MW SITAPURAM POWER LIMITED (SPL):

 

The total gross power generation during the last four months stood at 114.41 MU with an average PLF of 90.12%. The high level of power generation was achieved on account of improved coal availability under linkage as well as lesser dependence on market coal.

CONSTRUCTION PROGRESS ON 3.6 GW KSK MAHANADI POWER PROJECT:

 

The construction activity of KSK Mahanadi, a large, single location, Greenfield private power plant, has accelerated significantly in the recent months and is now in full swing, with more than 10,000 workers at the project site.

Significant progress as has been made on the first Unit of 600 MW and this unit is expected to Synchronise during the next 8 to 10 weeks. Some of the important milestones that have been recently achieved in this regard include:

·    Turbine Generator Box up, oil flushing complete - expected to be launched on barring gear very soon.

·    Start-up Boiler commissioned, main Boiler chemical cleaning process complete and Boiler light up expected soon.

·    Oil Synchronisation is now anticipated during April 2013 and coal based power generation commencing during May 2013.

·    Water Systems (Raw Water, DM & PT, IDCT & CW) readiness is in line with planned schedule.

·    Fuel Oil System - Hydro test and insulation of all 6 storage tanks completed and pumps erection towards completion.

·    RCC Shell casting for both the chimneys is complete, with Steel flue & Flue gas duct erection works for the first unit expected to complete shortly.

·    Coal Mills Motor testing is complete and CHP system implementation is moving towards completion.

·    Ash Dykes for both Fly ash & bottom ash are complete & ash handling system implementation towards completion

·    Switch Yard and Transformer Yard is ready for operation, with back charging of 400kV Switchyard completed

·    Evacuation LILO Line connected with PGCIL transmission network for power supplies into the grid is fully complete.

 

Progress is also being made on the second 600 MW unit as well as the other balance units.  Foundation works for the all the units have been completed and Boiler Drum Lifting of three units has also been satisfactorily achieved.  The structural erection works are progressing at a good pace. TG Erection of the second unit is at very advanced stage and TG Deck Casting of the next two units of 600 MW each  are also now complete, with the associated erection works now due to commence.

 

KSK Water Infrastructure:

 

During the period, significant parts of the completion works associated with the water infrastructure have been achieved and the water storage reservoir at the project site is complete and functional. The pipeline laying work for the water intake system, along with pumping stations from the river points, has been now been significantly completed.

 

KSK Mineral Resources:

 

This initiative to support mine development for coal supplies to the KSK Mahanadi Power project have achieved significant milestones of government permitting and it is now anticipated that the associated mining activity of overburden removal will commence shortly. Mine operations from the site resulting in coal supplies being made to the power plant are expected to start in the first half of the financial year 2013-14.

 

Raigarh Champa Rail Infrastructure:

 

First Phase one of this rail initiative, along with the associated siding and other infrastructure to enable loading and unloading at the power plant location, are close to completion and targeted for full completion in the April - June quarter this year. The operation of this in line with the first unit of 600 MW becoming operational is a major achievement for the Group and it is now anticipated that the second phase will also be taken up on an expeditious basis.  It is planned that the second phase also achieves completion around the same time the last 600 MW unit of the power plant is commissioned, making KSK Mahanadi a fully integrated power plant.   

 

Fuel Sources - Interim and Long Term:

 

The Group continues its efforts to consolidate both the short term and long term fuel sources for the KSK Mahanadi Power Project. With progress on the Gare Pelma Coal Block along with efforts for execution of a fuel supply agreement with South Eastern Coal Fields Limited, the Company has also begun efforts to source quantities of imported coal as well to meet the initial requirement in the interim. The Company now anticipates that short term fuel requirements will be satisfied by a combination of linkage coal, identified coal block and imported coal sources

 

With continued progress on the power generation plant and power supplies to local utilities, we continue to anticipate that the Government of India will offer a reasonable solution with respect to GMDC Fuel Supplies, in case permission to Morga-II is not forthcoming. The commissioning schedules are currently being planned to synchronize with the planned fuel supplies and stabilization.

 

Solar Power Initiatives

 

The solar energy generation initiatives of the Group are on track, with the proposed set up of a 10 MW solar power generation plant in the state of Rajasthan under the Jawaharlal Nehru National Solar Mission, linked with a power purchase agreement for 25 years with the prescribed government agency. The construction of this plant is in progress and the commissioning is expected very shortly.

 

Outlook

 

The outlook for the power sector remains positive with the anticipation of the government initiating the much required steps to resolve issues that have acted as impediments to the growth of the sector. KSKPV management note the continuing growth in demand in India for power and have positioned its companies to maximise returns in the long term and position KSKPV as a market leading power producer.

For further information, please contact:

 

 

KSK Power Ventur plc

 

Mr. S. Kishore, Executive Director

Mr. K. A. Sastry, Executive Director +91 40 2355 9922

 

 

Arden Partners plc

Richard Day 44 (0)20 7614 5900


This information is provided by RNS
The company news service from the London Stock Exchange
 
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