The board of directors of Power Grid Corporation of India Ltd (PGCIL) has approved the acquisition of the entire equity stake of Jaypee (Jaiprakash) Group in a bipartite joint venture.
In a stock exchange filing, PGCIL said that its board has approved the acquisition of the entire 74 per cent equity stake held by Jaiprakash Power Ventures Ltd (JVPL) in Jaypee Powergrid Ltd, a joint venture between PGCIL and JVPL (part of the Jaypee Group).
Accordingly, Jaypee Powergrid Ltd (JPL) will now become a wholly-owned subsidiary of PGCIL. The stock exchange filing added that PGCIL has obtained the concurrence of Niti Aayog for this acquisition.
JPL was incorporated on October 5, 2006 as a joint venture between JVPL (equity: 74 per cent) and PGCIL (equity: 26 per cent). It was formed to implement specific power transmission infrastructure associated with Jaypee Group’s 1,000-mw Karcham-Wangtoo hydropower project in Himachal Pradesh. The JPL started commercial operations on April 1, 2012 and recorded a sales turnover of around Rs.160 crore in FY20.
The Karcham-Wangtoo hydropower, located on River Sutlej, in Kinnaur district of Himachal Pradesh has been in operation since September 2011. It was commissioned by Jaypee Group but was later acquired by JSW Energy.
PGCIL, in the filing, added that the acquisition will be completed within FY21, which is before March 31, 2021, and that the acquisition cost will be informed once the share purchase agreement is executed.
PGCIL JVs
Way back in March 2006, PGCIL announced that it was willing to form joint ventures with IPPs (independent power producers) for setting up transmission infrastructure associated with their power generation plants. Accordingly, it entered into MoUs with five IPPs to set up such joint ventures. The IPPs were Essar Power, Torrent Power, Teesta Urja (Athena Group), Jaypee Group and ONGC Tripura Power.
Some of the JVs were subsequently formed. As of March 31, 2019, PGCIL had three such JVs in operation—Torrent Powergrid Ltd, Jaypee Powergrid Ltd (now proposed to be taken over) and Teestavalley Power Transmission Ltd.
(Featured photograph shows the Karcham Dam associated with the 1,000-mw Karcham Wangtoo hydropower project in Himachal Pradesh.)
