Mumbai: French energy producer Engie SA has put on the block a 1,000 megawatt (MW) power plant in India as it seeks to exit all coal-fired projects, according to three people familiar with the matter.

Engie, formerly known as GDF Suez SA, had bought a majority stake in the power plant from Hyderabad-based Meenakshi Energy and Infrastructure Holdings Pvt. Ltd in 2013.

The French company is looking to sell the plant along with its Indonesian asset PT Paiton Energy to get a better value for the assets, the people said on condition of anonymity as they are not authorized to speak to reporters.

“They (Engie) are reaching out to various players to explore all options. They want to club the loss-making Indian project with the Indonesian project, which is a better asset. There may be few takers for the Meenakshi plant as it does not have linkage to coal (mine)," said one of the three people cited above.

Engie, which has positioned itself as a renewables company under chief executive Gérard Mestrallet, had in December 2013 acquired a 74% stake in Meenakshi Energy and Infrastructure’s coal-fired project in Andhra Pradesh for an undisclosed sum.

Engie bought the stake after valuing the Meenakshi plant at an enterprise value of $760 million, said the second of the three people cited earlier.

At the time of the acquisition, the plant was producing 300MW, largely fuelled by imported coal. An additional 700MW of capacity was under construction, Engie had said in the 2013 statement (bit.ly/1jAzTxg).

Operational capacity now stands at 600MW, according to the third person cited earlier. “Because of increasing interest during construction and various pay operative expenses, the costs are already at levels which make it (the project) unviable," this person said.

PT Paiton Energy is the largest independent power producer in Indonesia, with a capacity of over 2,000MW, and is held by a consortium of Engie, Mitsui and Co., Tokyo Electric Power and PT Batu Hitam Perkasa, according to Engie’s website. Engie and Mitsui own 40.5% each in the project, while Tokyo Electric and PT Batu Hitam hold 14% and 5%, respectively.

JPMorgan has been offered the mandate to find buyers, the first person said. JPMorgan declined to comment.

Emails sent on 2 December requesting comments from Engie and Mitsui remained unanswered.

In October, Engie had said all its new investments in power production would be in projects that emit little or no carbon dioxide, in renewable energy and in natural gas.

“This economic and ecological decision to build no further coal-fired power plants leads to stop all projects which had not yet been firmly committed," the company had said. The French government holds a 33% stake in the firm.

Engie in November reported a sales decline for the nine months ended 30 September and said it would likely book an asset write-down in the fourth quarter of the calendar year.

Engie plans to sell more than $1 billion of stakes in Asian coal-fired power plants, Bloomberg reported in August, citing people with knowledge of the matter.

A lack of power-purchase agreements with the state electricity boards has affected most of the power plants commissioned in the past three years, forcing them to stay idle as supply far outstrips demand.

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