The Competition Commission of India (CCI) has approved the acquisition of the entire stake held by US-based AES Corporation in Odisha Power Generation Corporation Ltd (OPGC) by Odisha Hydro Power Corporation Ltd (OHPC).
In a release, CCI said that it has approved the acquisition of shares of OPGC by OHPC, under Section 31(1) of the Competition Act, 2002.
OPGC is a state-owned joint venture enterprise with Government of Odisha holding 51 per cent shareholding and the remaining 49 per cent shareholding held by US-based AES Corporation. This 49 per cent stake is held through two entities — AES OPGC Holding and AES India Pvt Ltd.
OPGC is engaged in the business of generation of power from coal based thermal power plants as well as mini hydro power projects.
OHPC is wholly-owned and controlled by the Government of Odisha. It is engaged in the business of generation of power from renewable sources namely, hydroelectric and solar power.
The proposed combination involves the acquisition by OHPC of 49 per cent equity shares in OPGC from AES OPGC Holding and AES India, pursuant to the share sale and purchase agreement, CCI said in the release.
Countering privatization
It may be recalled that Adani Power Ltd sometime in June this year had announced its plan to acquire the aforementioned 49 per cent stake in OPGC. APL was to do so for a consideration of around Rs.1020 crore.
In July 2020, CCI even approved the proposed acquisition of 49 per cent stake by APL in OPGC. Part of the Adani Group, APL is primarily engaged in the business of power generation.
Adani Power’s plan was set back by the Odisha government when, by exercising the Right of First Refusal (RoFR), decided to itself buy out the 49 per cent stake in OPGC, through OHPC.
Industry experts felt that this move by the Odisha government was against the overall philosophy of privatization.
It may be mentioned here that Odisha government in recent month has done well to privatize its power distribution sector, with Tata Power selected as the joint venture partner in three state government-owned distribution companies. Accordingly, Tata Power now owns 51 per cent along with management control in CESU, WESCO and SOUTHCO. (Read more).
OPGC
The main power generation asset of OPGC is the Ib Valley coal-fired power project, located in Odisha’s Jharsuguda district. The plant traditionally had two units of 210 mw each, commissioned in 1994 and 1996, respectively. With the recent addition of two supercritical units of 660 mw each, commissioned in late 2019, the plant’s total generation capacity currently stands at 1,740 mw. Besides, this plant, OPGC also has a series of mini hydropower plants with an aggregate installed capacity of around 5 mw.
Featured photograph (source: AES) gives a panoramic view of OPGC’s Ib Valley thermal power project in Odisha.
