Adani Power has won the title of being the highest bidder for the KSK Mahanadi thermal power plant in Chhattisgarh. This project is going to have a total capacity of 1,800 MW. The Adani Group had made an offer of INR 27,000 crore for this project. This offer made by the Adani Group ensures a 92% recovery from the lenders. The KSK Mahanadi project is currently undergoing insolvency proceedings at the National Company Law Tribunal.
As per recent reports, 10 financial bidders were received for the thermal power company. Other big names include Vedanta, NTPC, Coal India, JSW Energy, Capri Global Holdings, etc. However, the Adani Group outshone the other bidders. The Adani Group’s offer is a combination of INR 12,500 crore in upfront cash, and INR 9,000 crore in accumulated cash as three of the units of the plant are operational and estimated receivables of INR 5,500 crore.
The Troubles For KSK Mahanadi:
The KSK Mahanadi thermal project had to undergo a lot of troubles while carrying out its business operations. The company’s trouble started after it defaulted on bank loans worth INR 20,000 crore in 2018. At that time, the lead lender for the project was Power Finance Corporation Limited. It is a state-owned non-banking financial corporation. After the default, the lender started debt structuring. This involves the sale of various assets of the company.
Adani Power was one of the top bidders for the project at that time. However, it withdrew its bid in 2019. In fact, the Adani Group had shown its interest in acquiring the KSK Mahanadi thermal power plant even before it was admitted for insolvency in October 2019. During late 2018, the company had offered INR 10,300 crores for this project. However, it backed out in 2019 after the Uttar Pradesh Government revised the tariff downwards. The company was submitted to NCLT in 2020 under the insolvency and bankruptcy code.
The Need For The Insolvency Proceedings:
As our country is facing a huge rise in its power demand mainly because of the ongoing summers, the centre is looking for a quick turnaround for its plans for the KSK Mahanadi project. This will help increase the country’s power supply. Electricity can be provided to the different homes in the country in a consistent and reliable way. Prior to the insolvency proceedings, the project was fully operational. It had power purchase agreements with Tamil Nadu, Andhra Pradesh, and Uttar Pradesh. However, it defaulted because of a shortage of consistent coal supply.
Earlier, the State Bank of India was one of the biggest lenders to the project. It tried its best to resolve the issue through the Samadhan scheme. However, the attempt failed. With the Adani Group taking control over this project, the KSK Mahanadi project will be able to start conducting its project operations with full force. It is also expected that the Adani Group is going to carry out various expansion operations at the thermal power plant. Because of the existence of various Adani coal mines which come under the control of the Adani Group, there will be no shortage of coal supply. The power generation can take place smoothly. Electricity generation will also be triggered.
Adani’s Presence in the Thermal Power Sector:
The Adani Group already has vast experience in the thermal power sector. The company already has some of the major power plants under its control. The Adani coal mines are also the major coal suppliers in the country. The company also operates some of the largest thermal power plants abroad. The Adani Bangladesh thermal power project is the first transnational thermal power project to be undertaken by the Adani Group. It has a big role to play in offering electricity to different areas of Bangladesh. The electricity from the Godda power plant in Jharkhand is transferred to Bangladesh through dedicated transmission lines so that the people can be supplied with consistent electricity.
The Carmichael project in Australia is one of the biggest Adani coal mines. The coal mine has a huge mining capacity. The coal generated from this mine is mainly transferred to India for power generation in the different states. The company is already in talks for operating more such thermal power projects both in India and abroad. This will help meet our power demands and lead us to prosperity.
Conclusion:
By taking control of KSK Mahanadi, the Adani Group aims to increase its hold over the country’s power sector. It also plans to ensure that our country’s power demands are met so that residential and industrial activities can take place smoothly. With these initiatives, the living conditions of the people of our country will also change for the better. We will get to witness a better tomorrow.
