India Approves $1.8 Billion Acquisition of Two Hydropower Projects for a Combined 1,391 MW

Officials from the antihegemonic Competition Commission of India (CCI) announced it has granted approval to JSW Energy Ltd. to acquire the 300-MW Baspa II and 1,091-MW Karcham Wangtoo hydroelectric projects, both located in the state of Himachal Pradesh. JSW said the acquisition would make it “the largest private sector hydropower generator in India,” bringing its “operating hydropower capacity to 1,391 MW.”

The Baspa II and Karcham Wangtoo US$1.8 billion purchase from Jaiprakash Power Ventures Ltd. (JPVL), according to CCI, is pursuant to a securities purchase agreement entered into Nov. 16, 2014 between JSW, JPVL, Himachal Baspa Power Co. Ltd. (HBPCL) and Jaypee Group Employees Welfare Trust.

In its approval, CCI noted that HBPCL, JSW and its subsidiary JSW Power Trading Co. Ltd. (JSWPTL) are engaged in power generation in India. However, the company’s structure and the amounts of power it would manage are “insignificant” in the committee’s view, when compared to other power producers in India.

“JSWPTL is involved in the power trading business, has occasional business engagement with Karcham Project for sale of power on merchant/short term basis,” CCI said. “In this regard, it is observed that there are many players engaged in the power generation business in India which include public sector undertakings like National Thermal Power Corporation Ltd., Maharashtra State Power Generation Company Ltd., Damodar Valley Corporation, National Hydroelectric Power Corporation Ltd., Nuclear Power Corporation of India Ltd., along with various private players.

“Further, on the basis of installed capacity, the market shares of each of JSW and [Baspa II and Karcham] in the power generation business in India, is insignificant. It is also noted that the vertical relation between JSWPTL and Karcham Project is insignificant.”

JSW has an installed capacity of 3,140 MW and is developing an additional 8,630 MW, which includes the US$286 million, run-of-river, 240-MW Kutehr hydroelectric project on the Ravi River in Himachal Pradesh that JSW acquired in 2007.

CCI’s acquisition approval allows JSW to advance in achieving its stated goal of “owning plants that have a total of 12,000 MW of power generation capacity by 2025.”

JSW is an energy group subsidiary of the US$11 billion conglomerate O.P. Jindal Group.

Lead image: Hydro plant via Shutterstock

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