CESC to invest Rs2,000 crore for solar power project

CESC to invest Rs2,000 crore for solar power project

Kolkata: Power utility CESC Ltd is looking to invest Rs2000 crore to develop a 200 mega-watt (MW) solar power project in the state of Rajasthan, vice-chairman Sanjeev Goenka told a news conference on Friday.

“For the first phase, the work is going to start in the next 2-3 months. We have already acquired 300 acres of land near Bikaner," Goenka said.

The project will be developed over a period of five years and the company is in talks with some firms for technology partnerships, Goenka said.

India, whose grid-connected solar power capacity is close to 3 MW, recently launched its solar policy framework, National Solar Mission, that aims to increase it by more than 300 times to 1,000 MW by 2013.

A spate of firms have rushed in to tap the fledgling sector. Areva Renewable, a unit of France’ Areva, is considering solar-thermal projects in India, it said in April. Bharat Forge has said it is targeting 100 MW of solar power projects over a 3-4 year period.

Apart from solar power, CESC has also achieved financial closure for a 600 MW thermal power project at Haldia in West Bengal and the firm would pump in around Rs3300 crore to develop the project, the work for which will commence shortly.

The firm is also reviving another 600 MW power project in Balaghar in West Bengal by investing Rs3200 crore, Goenka had said in April.

Earlier on Friday, CESC had reported flat April-June net profit at Rs110 crore, despite a 34% growth in sales to Rs1,082 crore, as a rise in fuel prices hurt tarrifs and profits.

“Steep rise in fuel price impacted the power purchase price and tariffs significantly which impacted our net profit".

Spencer’s Deal Delayed

CESC, which also runs retail chain Spencer’s, has been looking to raise funds by selling a stake in the unit but a potential deal with a private equity firm fell through on valuation deadlock.

“We were in talks with a particular private equity firm, but it could not go through because of the valuation issues," Goenka said without elaborating.

But the plan to divest stake in Spencer’s is not shelved, he said.

“We are in the process of dialogues with 2-3 other private equity players".

Spencer’s is looking to add 200,000 square feet this fiscal, and expects revenues of around Rs950 crore in FY11, Goenka said.

Under Spencer’s, CESC currently has 900,000 square feet of retail space. Revenue from retail business stood at about Rs900 crore in FY10, Goenka had said in April.

“We have achieved a profitability at the store level. Overall Spencer’s should breakeven in next 18 months".

At 1:35 p.m., CESC shares were down 0.82% at Rs400.2 in a firm Mumbai market.