International Finance Corporation (IFC), the private investment arm of the World Bank, is making a project-level investment of about $82 million (Rs 380.66 crore) in Bhilwara Energy Limited, a subsidiary of LNJ Bhilwara Group which has diversified presence across power, electrodes and textile.
The IFC investment is a combination of both equity and debt. IFC will provide a debt of $67 million and equity of $15 million to AD Hydro Power Ltd, a 192-MW project in Himachal Pradesh, being jointly developed by Bhilwara Energy and SN Power of Norway. IFC will also finance the project’s cost overruns, VCCircle has learnt. The project is in the final stage of completion.
IFC will infuse $15 million as equity for a 12% stake in AD Hydro. IFC has also agreed to invest an additional $10 million as equity to carry the figure to $25 million. It may also consider warrants, which entitle additional subscription to the equity of Bhilwara Energy at a later date.
Bhilwara Energy currently operates Malana Power Company Ltd, an 86-MW project in Himachal Pradesh, along with SN Power. Apart from AD Hydro, the company is also developing three other hydro power projects - two in India and one in Nepal. These projects will be located in Arunachal Pradesh and Punjab in India and the Himalayan terrain of Nepal. The proposed projects will be completed by 2012 end, with a total capacity of about 270 MW.
It further plans to develop and operationalise a portfolio of several medium to large scale hydro power assets with a total power generation capacity of about 2,200 MW over the next decade.
LNJ Bhilwara holds about 93.1% stake in Bhilwara Energy while the remaining 6.9% stake is held jointly by three investors Wachovia (2.65%), Jacob Ballas (0.21%) and New York Life Investment Fund (4.01%). The two other entities of LNG Bhilwara Group are HEG Limited (electrodes) and Rajasthan Spinning and Weaving Mills Ltd (textile).
Among recent investments in the hydel power space in India, Global Environment Fund (GEF) invested $46.3 million for an undisclosed stake in Greenko Plc, an AIM-listed clean energy producer.
