JSW Energy to Buy 1391 MW Hydro Electric Projects from Jaiprakash Power Ventures

The power company of JSW group, JSW energy (JSWE) is in the process to create a history and become the largest private sector hydro power generator in the country. JSWE agrees to acquire the 300 MW Baspa II and 1091 MW Karcham Wangtoo hydro electric projects, both located at Himachal Pradesh from Jaiprakash Power Ventures (JPVL).

JSWE has agreed to pay the consideration linked to a base enterprise value of approximately Rs 9700 crore for both projects, subject to fulfillment of conditions precedent by the parties. Post acquisition aggregate installed and operational power generation capacity of the company will enhance to 4531 MW. By the way of this acquisition, JSWE is trying to diversify its portfolio with operational thermal 3140 MW and hydro 1391 MW power generation capacity.

By the way of acquisition, JSWE is strategically expanding its presence in the State of Himachal Pradesh where it is also setting up 240 MW Hydro Electric Project at Kutehr. This acquisition and proposed project will help the company to diversify its largely coal/lignite based thermal portfolio and achieve significant synergies. As the acquiring capacity is fully operational, the JSWE can expect immediate cash flow from the same. The Baspa project and Karcham Project have an estimated life of over 29 years and 37 years respectively & which are extendable for a further period of 20 years.

Commenting on the acquisition, Sajjan Jindal, Chairman & Managing Director of JSWE said, “This is an attractive deal for our shareholders, as it is expected to earnings accretive on closure. Our strategy is to increase capacity manifold and create synergies through a mix of organic and inorganic opportunities, supported by excellence in operations to accelerate the growth in shareholder value”.

The stock of JSWE was trading at Rs 85.10 up by more than 12 per cent from its previous day close on Monday after the announcement of the news.