JSW Energy To Build KSK Mahanadi Plant At 40% Lower Cost Than Average

JSW Energy is to complete the remaining construction of KSK Mahanadi Power Co.’s coal-based power plant at approximately 40% lower than the benchmark cost of building a greenfield thermal capacity, according to the company’s Joint Managing Director and Chief Executive Officer, Sharad Mahendra. Explaining the reason behind this, Mahendra told NDTV Profit that the majority of the construction work has already been completed. 

JSW Energy recently received a Letter of Intent (LoI) to acquire KSK Mahanadi Power Co., which is currently under insolvency proceedings. KSK Mahanadi Power Co. owns a 3,600 megawatt (MW) thermal power plant in Chhattisgarh, which has six units of 600 MW each. 

Currently, three units are under operation, whereas 40% of the fourth unit has been completed. The plant has a firm arrangement for water and coal transportation for the entire 3,600 MW. This puts JSW Energy at an advantage, as it only needs to complete work on the two full units and the remaining portion of the fourth unit.

“In terms of percentage, we can see at least maybe 30 to 40% lower (than the benchmark cost of building a greenfield thermal capacity),” he said.

The top executive said that most of the plant is almost ready.

“The balance of the plant is fully ready. Water pipeline for the entire 3,600 MW facility, the transmission line power evacuation—all those things are ready,” he said.

JSW Energy will only make significant investments in installing the volatile mine generator and some support functions, Mahendra mentioned.

“The significant investment that is going to be there is only in the VTG, which is the volatile mine generator, and maybe there will be some support functions. So it (investment) will be significantly lower,” he said.

Since most of the plant is fully ready, the facility will also come up much faster than other projects, the JSW Energy CEO emphasised.

“This should happen faster, and then gradually another 2 units of 600 will take some time, but it will happen much faster as compared to any other thermal project when we start the work,” he said.

However, it is not likely to be fully functional during the next year.

“Maybe not next year because it's still the supplies and other things that we have to place the order for, everything. Maybe in 18 to 24 months, we feel that another capacity will get added,” Mahendra said.

Shares of JSW Energy was trading 1.46% higher at Rs 569.70, as of 11:19 a.m., compared to 0.31% rise in Nifty 50 at 23,285.60.