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We hosted the management of NHPC in our Access India conference. Key
takeaways from the meetings are-
** Capacity addition on-track for FY13: 313MW (231 MW of Chamera,
22MW of Chutak and 60MW of Uri II) is likely to be added by March 2012.
TLD-IV would be commissioned by March 2013. All the units of TLD III will
be commissioned by Aug 2012 to Sep 2012, Uri II by April 2012, TDL IV by
March 2012, Nimoo Bazgo by April-Sep 2012. While U#1 of Parbati III will
start by Jan 2013, full commercialization would depend on water-flow from
Parbati II, which has been delayed due to technical and contractual issues.
** For its large 2GW Subansiri project, company has spent INR55bn out of
INR100bn which has been delayed due to local protests. In the 12th Plan,
NHPC has a target of adding capacity to the tune of 4,189MW.
** While J&K Govt intends to take back NHPC's older projects in the state
at depreciated cost, NHPC believes the ownership is with them as per
agreements and PPAs have been signed with 6-7 other states.
** CERC has allowed recovery of water cess from beneficiaries. Regulator
continues to allow not only geological surprises but also cost overruns due
to human intervention (like strikes) as a pass-through.
** The company has downsized its pipeline of projects to 11GW from
16GW mainly due to transfer of few projects to the private sector and denial
of environmental clearance for Kotli Bahl (INR800 mn survey and investigation
expenses written-off in 3QFY12). All other pipeline projects are expected
to receive clearances with no major obstacles, including the new thermal
JV projects with Orissa govt. For Tipaimukh (1500MW), some clearances
are in place. Projects which are awaiting sanction such as Kotli Bhel Stage
IA (195MW), Teesta IV (520MW), Tawang I (600MW), Tawang II (800MW)
have got approvals except CEA and Public Investment Board clearances.
** With respect to current regulations, the management hinted that CERC
regulations are pro-hydro, but they need to think from IRR perspective rather
than only ROE to improve further participation in hydro sector.
** Most good hydro sites have been taken by either States or allocated to
private sector for upfront royalty. NHPC has been developing projects at
difficult sites like Leh (J&K) earlier and has expertise in designing/planning
such projects in harsh conditions.
We have a Buy rating with INR28/sh target price
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We hosted the management of NHPC in our Access India conference. Key
takeaways from the meetings are-
** Capacity addition on-track for FY13: 313MW (231 MW of Chamera,
22MW of Chutak and 60MW of Uri II) is likely to be added by March 2012.
TLD-IV would be commissioned by March 2013. All the units of TLD III will
be commissioned by Aug 2012 to Sep 2012, Uri II by April 2012, TDL IV by
March 2012, Nimoo Bazgo by April-Sep 2012. While U#1 of Parbati III will
start by Jan 2013, full commercialization would depend on water-flow from
Parbati II, which has been delayed due to technical and contractual issues.
** For its large 2GW Subansiri project, company has spent INR55bn out of
INR100bn which has been delayed due to local protests. In the 12th Plan,
NHPC has a target of adding capacity to the tune of 4,189MW.
** While J&K Govt intends to take back NHPC's older projects in the state
at depreciated cost, NHPC believes the ownership is with them as per
agreements and PPAs have been signed with 6-7 other states.
** CERC has allowed recovery of water cess from beneficiaries. Regulator
continues to allow not only geological surprises but also cost overruns due
to human intervention (like strikes) as a pass-through.
** The company has downsized its pipeline of projects to 11GW from
16GW mainly due to transfer of few projects to the private sector and denial
of environmental clearance for Kotli Bahl (INR800 mn survey and investigation
expenses written-off in 3QFY12). All other pipeline projects are expected
to receive clearances with no major obstacles, including the new thermal
JV projects with Orissa govt. For Tipaimukh (1500MW), some clearances
are in place. Projects which are awaiting sanction such as Kotli Bhel Stage
IA (195MW), Teesta IV (520MW), Tawang I (600MW), Tawang II (800MW)
have got approvals except CEA and Public Investment Board clearances.
** With respect to current regulations, the management hinted that CERC
regulations are pro-hydro, but they need to think from IRR perspective rather
than only ROE to improve further participation in hydro sector.
** Most good hydro sites have been taken by either States or allocated to
private sector for upfront royalty. NHPC has been developing projects at
difficult sites like Leh (J&K) earlier and has expertise in designing/planning
such projects in harsh conditions.
We have a Buy rating with INR28/sh target price
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