The first signs of consolidation are visible in India’s power sector.
India’s largest thermal power company, NTPC Ltd, is exiting its non-core assets comprising of 1,611 mega watt (MW) of hydel power projects to public sector units including National Hydroelectric Power Corp (NHPC) and others that possess core competence of executing hydro power projects.
Likewise, hydro power major NHPC will concentrate on the development of hydel power projects and is ready to transfer its entire portfolio of 2,640 MW of thermal power projects to NTPC.
The proposal to exit non-core assets was mooted by power minister Piyush Goyal at a recent meeting with heads of power PSUs. During the meeting, executives of state-owned power firms were asked to look into the prospects of concentrating on their core strengths while staging an exit from the non-core businesses.
“We keep exploring lots of fresh ideas that makes sense and this is one such proposal … although no final decision has been taken so far on this yet,” Goyal told HT.
A letter expressing NTPC’s willingness to transfer its entire portfolio of hydel power projects to PSUs such as NHPC has already been sent by the company to the power ministry. NHPC, too, has sent its consent to the ministry for a similar transfer of its thermal assets. HT is in possession of both the letters.
“I find logic in what the minister said,” NTPC CMD Arup Roy Choudhury told HT. “We have proposed transferring the development of our hydro projects to NHPC, SJVN and THDC.”
The modalities for shifting these projects would be worked out after consultations with the ministry, said ABL Srivastava, finance director, NHPC.