[Ferro-Alloys.com] Indian private-sector utility JSW Energy has terminated a proposed deal to acquire a coal-fired power plant in east India citing "continued uncertainty" amid the Covid-19 pandemic.
The company had entered into an agreement with Indian infrastructure firm GMR in February this year to buy an operational 1.05GW plant in Odisha state for 53.21bn rupees ($707mn). JSW in May put the deal on hold as it launched a review of its spending and growth plans after the pandemic dented Indian power demand and overall economic activity.
JSW will not incur termination costs as the long stop date and the timeframe set to conclude the deal could not be met, the company said, after reporting a nearly 13pc fall in its April-June quarter profit from a year ago to Rs2.13bn amid weaker power generation.
JSW's generation fell in line with a 16.2pc fall from a year earlier in the country's power demand during the quarter, mainly as nationwide curbs to contain Covid-19 curtailed industrial and business activity, although there has been some recovery in electricity consumption after India partially lifted the curbs in June.
"This trend demonstrates that the economy is coming back and [the] lockdown is easing up and we are expecting that by October, we may be seeing positive growth in power demand," said JSW's chief executive Prashant Jain.
JSW imports around 5.5mn-6mn t/yr of coal for its 1.2GW Ratnagiri power plant on the west coast of Maharashtra state and the 860MW Vijayanagar in south India's Karnataka state. The power plants have conditional approval from authorities to blend up to 50pc of domestic coal with imported material.
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