International Finance Corporation will lend $15 million to Bhilwara Green Energy Ltd, to develop, own and operate a 51 MW wind farm in Maharashtra. This venture also marks an expansion of activities for Bhilwara Energy, which has been primarily involved in hydroelectric projects.
The wind power project will be built under EPC contract with ReGen Powertech, an Indian company which designs, manufactures and installs gearless wind turbine generators, using German technology licensed from Vensys AG.
The power will be sold to Maharashtra State Electricity Distribution Company under a 13-year Power Purchase Agreement (PPA). In addition, the project will be eligible to receive generation-based incentives.
The expected total project cost is approximately $71.5 million and IFC will provide up to $15 million as loan to Bhilwara Green Energy Ltd.
Last July, IFC had invested $25 million to purchase 5.24 per cent stake in Bhilwara Energy. Incidentally, the firm is the holding company, which invests and develops all hydro and other renewable projects of the LNJ Bhilwara Group.
The promoters, through a few family-held entities and two public-listed firms – Rajasthan Spinning & Weaving Mills (17.41 per cent) and HEG (25.80 per cent) – own as much as 83.12 per cent of the company. Besides IFC, India Clean Energy III (7.87 per cent) and other investors such as Wachovia, Jacob Ballas and New York Life Investment Fund own the balance stake.
The company currently has two operating hydro power plants, totalling 278 MW, and it is aiming to develop or acquire new green-field power projects in India and Nepal. For the year ended March 31, 2010, its consolidated revenues and net income were $37.9 million and $21.8 million, respectively.
With this transaction, IFC’s total committed capital (debt and equity) in India for the first six months of 2011 crosses the $500 million mark, according to VCCircle estimate.
IFC also has an existing relationship with the Bhilwara Group in the AD Hydro Project in which it has committed a debt amount of around $67 million and picked 12 per cent equity for $15 million.
Bhilwara Energy holds 51 per cent equity stake in Malana Power Company Ltd (Kullu), a joint venture with S N Power, Norway. It also holds 44.9 per cent of AD Hydro Power Ltd (ADHPCL) indirectly, through Malana Power, which in turn owns 88 per cent in AD Hydro Power.
BEL also holds 51 per cent in power consultancy firm Indo Canadian Consultancy Services Ltd, a joint venture with RSW Inc. of Canada.
The group is also exploring various opportunities in the solar power aggressively.
