China’s largest power producer Huaneng Power is in talks to become an equity partner in IL&FS’s 4,000MW power project being built in Gujarat. The move affirms a global trend that has seen China become a leading exporter of thermal and gas power equipment due to its shift to shale gas for power.
“At this stage, we are hopeful that they will acquire up to 74% of the equity in the project,” said IL&FS vice chairman Hari Sankaran told HT.
IL&FS has signed an agreement with Huaneng for developing the Rs 24,000-crore coal-fired coastal power project at Nana Layja in Kutch. “The Chinese company is currently doing a due diligence ahead of finalising its plan,” Sankaran said.
The power project is being developed under IL&FS Energy Development Corporation, which is the energy arm of IL&FS. It has built capacity of around 900 MW in the green energy sector. “On the basis of commissioned capacities, a little over 50% is in renewable sector,” said Sankaran.
Huaneng has been actively looking at thermal opportunities overseas, following a move by the Chinese government to promote projects based on shale gas or natural gas. China, which was once the largest importer of coal for power projects, has now started to export the commodity.
This has led to China becoming one of the largest suppliers of power equipment to India, accounting for over 60% of the equipment ordered by private power developers here.
“We have raised $1 billion from the Industrial and Commercial Bank of China and this collaboration is a part of the government’s initiative to develop increased business ties between India and China,” said Sankaran.