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UBS Investment Research
India Power Utilities
MoEF go ahead for six coal blocks in Orissa
„ Event: MoEF clears six coal blocks in no-go areas for 6,920MW projects
According to media reports, the Ministry of Environment and Forests (MoEF) has
cleared six coal blocks in Orissa. These blocks were earlier in ‘no-go’ areas (in
2009, the government announced ‘go’ and ‘no-go’ areas to restrict the
environmental impact of mining in forest areas). The coal production from these
mines will be used for power generation by the Bedabahal Ultra Mega Power
Project (4,000MW), National Thermal Power Corporation (NTPC) (1,600MW)
and Orissa Power Generation (1,320MW).
„ Impact: domestic coal based Bedabahl UMPP may be awarded soon
We believe that in consultation with the Ministry of Power and Ministry of Coal,
MoEF has become more flexible in approving projects which impact core
industries. We also believe that after slow activity on the Ultra Mega Power
Projects (UMPPs) for the past two years, the clearance of three coal blocks for the
Bedabahal UMPP should contribute to the faster award of the project.
„ Action: we prefer companies with low fuel supply risk
We believe this is a positive for power generation projects in India. We also think
the government is serious about the issue of insufficient availability of domestic
coal for power plants. Please also refer to our note India Power Utilities: 11 coal
blocks de-allocated in one month, dated 28 June 2011. We prefer companies with
fuel cost pass-through (NTPC, Reliance Infrastructure). We also think companies
or utilities with access to domestic captive fuel would be at an advantage (Reliance
Power).
„ Our top pick: Power Grid, rated Buy
We prefer Power Grid Corporation of India (Power Grid) and Lanco Infratech. We
also have Buy ratings on NTPC, Tata Power and Reliance Infrastructure.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
India Power Utilities
MoEF go ahead for six coal blocks in Orissa
„ Event: MoEF clears six coal blocks in no-go areas for 6,920MW projects
According to media reports, the Ministry of Environment and Forests (MoEF) has
cleared six coal blocks in Orissa. These blocks were earlier in ‘no-go’ areas (in
2009, the government announced ‘go’ and ‘no-go’ areas to restrict the
environmental impact of mining in forest areas). The coal production from these
mines will be used for power generation by the Bedabahal Ultra Mega Power
Project (4,000MW), National Thermal Power Corporation (NTPC) (1,600MW)
and Orissa Power Generation (1,320MW).
„ Impact: domestic coal based Bedabahl UMPP may be awarded soon
We believe that in consultation with the Ministry of Power and Ministry of Coal,
MoEF has become more flexible in approving projects which impact core
industries. We also believe that after slow activity on the Ultra Mega Power
Projects (UMPPs) for the past two years, the clearance of three coal blocks for the
Bedabahal UMPP should contribute to the faster award of the project.
„ Action: we prefer companies with low fuel supply risk
We believe this is a positive for power generation projects in India. We also think
the government is serious about the issue of insufficient availability of domestic
coal for power plants. Please also refer to our note India Power Utilities: 11 coal
blocks de-allocated in one month, dated 28 June 2011. We prefer companies with
fuel cost pass-through (NTPC, Reliance Infrastructure). We also think companies
or utilities with access to domestic captive fuel would be at an advantage (Reliance
Power).
„ Our top pick: Power Grid, rated Buy
We prefer Power Grid Corporation of India (Power Grid) and Lanco Infratech. We
also have Buy ratings on NTPC, Tata Power and Reliance Infrastructure.
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