The global aspirations ofNTPC Ltd, India’s largest power-generation company, suffered a setback, with Globeleq rejecting its bid for a 683MW combined-cycle gas project in Egypt.
Globeleq wanted the Indian firm to participate in the sale of its projects in Asia, Latin America and Africa. However, NTPC was only interested in the Egyptian project.
Globeleq is a power company owned by CDC Group Plc, a UK government-owned fund. CDC had appointed Lehman Brothers as consultant for the sale of Globeleq’s global operations, with assets valued at more than $1.5 billion (Rs6,600 crore). Globeleq has investments in 20 power companies in 15 countries. Around 40 other companies have shown interest in the sale.
Africa is important to NTPC’s strategy to become a global player in the field of power generation. The company is close to finalizing a contract for the supply of liquefied natural gas (LNG) from Nigeria, a project that may require an estimated investment of $1.7 billion.
It is also planning to set up a 700MW gas-based power plant and a 500MW coal-based unit in India.
Globaeleq rejected NTPC’s bid, said an executive of the latter on condition of anonymity, because “we were told that we should be interested in more than one block to which we did not agree”.
NTPC had bid a little less than $200 million for the project at Sidi Krir near Alexandria, Egypt. While the fuel for the project is supplied by Gasco, a government-owned gas distribution company, the plant provides power for the national grid to the Egyptian Electricity Holding Co.
Globeleq also has three other power-generation projects in Africa, with a total capacity of 542MW. The company is also the operator of the Umeme electricity-distribution business in Uganda.
“Any seller would like to sell off its big projects first. As Globeleq’s bigger assets are in Latin America, it wants to hive them off first. There was a mismatch between the buyer’s and seller’s expectations,” said a power sector analyst, who did not wish to be identified.
Apart from NTPC, other power sector players such as Reliance Energy Ltd and Essar Power are also interested in Globeleq.