Group Corporate Presentation. June 2014

Transcription

1 Group Corporate Presentation June 2014

2 Disclaimer This presentation has been prepared by KSK Energy Ventures Limited (the Company ) solely for information purposes without any regard to any specific objectives, financial situations or informational needs of any particular person. This presentation may not be copied, distributed or disseminated, directly or indirectly, in any manner. Failure to comply with this directive may result in a violation of the applicable law in certain jurisdictions. By reviewing this presentation, you agree to be bound by the restrictions contained herein, and to maintain absolute confidentiality, regarding the information disclosed in these materials. This presentation contains statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its directors and officers with respect to the results of operations and financial condition of the Company. 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This presentation is not a prospectus, a statement in lieu of a prospectus, an offering circular, an advertisement, a private placement offer letter or an offer document under the Companies Act, 2013 and the rules made thereunder, the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, or any other applicable law. 2

3 KSK Group an overview KSK Power Ventur plc ( KSK plc ) KSK Energy Limited, Mauritius 67.60%* 100 % 100 % KSK Energy Ventures Limited ( KSKEV ) Operating 1472 MW 6 SPVS 872 MW KSK Mahanadi 600 MW Under Construction 3000 MW of which II unit of 600 MW expected to be commissioned by 100 % 100 % KSK Energy Company ( KECPL ) Railway and water transportation infrastructure Coal block mine development support KSK Green Energy Pte Limited, Singapore Project companies Wind Solar KSK Energy Ventures Limited ( KSKEV ).. Arasmeta (86 MW) Sai Regency (77 MW) Sitapuram (43 MW) VS Lignite (135 MW) Wardha (540 MW) Sai Maithili (10 MW) KSK Mahanadi (3.6 GW) Operational Under Construction partially operational *Balance 32.4 % held by various public shareholders at BSE/NSE listed KSKEV 3

4 Background Two Listed entities KSK Power Ventur plc LSE Listed main holding Company KSK Energy Ventures Limited Indian stock exchanges listed generation holding company Founded by KA Sastry and S Kishore, first generation entrepreneurs with extensive energy sector consulting experience prior to business setup KSK amongst the few developers in India with extensive project footprint across the country - Chhattisgarh, Maharashtra, Rajasthan, Tamil Nadu, Andhra Pradesh Valued relationship with Industrial consumers, State Mineral Development Corporations and power utilities across states Access to project debt from major Indian project lending institutions and recent availability of External Commercial Borrowing Experienced Board led by Padma Bhushan Sri T.L.Sankar, Non Executive Chairman who is a distinguished energy expert of India 4

5 KSK Power Ventur plc - The Board Non Executive Chairman Padma Bhushan Mr. T.L. Sankar, Non-executive Mr. Dlouhy graduated Chairman with a Bachelor and Renowned Master in degrees India as in an Mathematical energy expert Economics with more than and Econometrics four decades of from the Prague experience School in the of Economics energy sector. and Served studied Management various distinguished at Catholic positions University of Louvain, Belgium. Mr. Dlouhy served as Minister Energy of Secretary Industry and to the Trade Government of the Czech of Andhra Republic, Pradesh responsible for the policies Secretary, in the Fuel areas Policy of Fuels. Committee Principal Secretary of the Working Group on Energy Policy Member of the Advisory Board on Energy, Government of India, Member, Integrated Energy Policy Committee. Chairman of the Andhra Pradesh State Electricity Board United Nations Adviser on Energy issues to the governments of Sri Lanka, Tanzania, Bangladesh amongst others Executive Directors Mr. K.A. Sastry Executive Director Mr. Sastry is one of the founders of KSK and heads its execution and operations areas, as well as having responsibility for the financial accounting and taxation Mr. S. Kishore Executive Director Mr. Kishore co-founded KSK along with Mr. Sastry and heads its business development and capital formation. Earlier Mr. Kishore was a financial advisor & consultant for major domestic as well as international businesses and has advised multiple energy companies/ utilities/ market entrants since early nineties. Non-executive Directors Mr. S.R. Iyer Non-Executive Director Mr Iyer retired as Managing Director of the State Bank of India Mr. Abhay Nalawade Non-Executive Director Mr Abhay has three decade of experience in Power Equipment Business and earlier CEO of Thermax Mr. Vladimir Dlouhy Non Executive Director Mr Vladimir is a distinguished Economist and served as Deputy prime minister of Czechoslovak government and federal minister of economy. Mr. Keith Nicholas Henry Non Executive Director Mr. Henry has rich experience in global power and energy sector. Mr. Guy Delemere Lafferty Non Executive Director Mr Guy is partner in Hoegh capital Partners. Formerly, he worked at Royal Bank of Canada & National Westminister Bank 5

6 KSK Energy Ventures - The Board Non Executive Chairman Padma Bhushan Mr. T.L. Sankar, Non-executive Mr. Dlouhy graduated Chairman with a Bachelor and More Master than four degrees decades in Mathematical of experience in Economics the energy and sector. Econometrics Served various from the Prague distinguished School positions of Economics and studied Management at Catholic University of Louvain, Energy Belgium. Secretary Mr. to Dlouhy the Government served as Minister of Andhra of Industry Pradesh and Trade of the Czech Secretary, Republic, Fuel responsible Policy Committee for the policies Principal in the Secretary areas of of Fuels. the Working Group on Energy Policy Member of the Advisory Board on Energy, Government of India, Member, Integrated Energy Policy Committee. Chairman of the Andhra Pradesh State Electricity Board United Nations Adviser on Energy issues to the governments of Sri Lanka, Tanzania, Bangladesh amongst others Executive Directors Mr. K.A. Sastry Executive Director Mr. Sastry is one of the founders of KSK and heads its execution and operations areas, as well as having responsibility for the financial accounting and taxation Mr. S. Kishore Executive Director Mr. Kishore co-founded KSK along with Mr. Sastry and heads its business development and capital formation. Earlier Mr. Kishore was a financial advisor & consultant for major domestic as well as international businesses and has advised multiple energy companies/ utilities/ market entrants since early nineties. Non-executive Directors Mr. S.R. Iyer Non-Executive Director Mr Iyer retired as Managing Director of the State Bank of India Mr. Girish Kulkarni Non-Executive Director Formerly ICICI securities, and expertise in Indian capital markets Mr. Anil Kutty Director Formerly Indian Administrative Service, Formerly Joint Secretary, Power, Government of India and Chairman and Managing Director, AP TRANSCO Mr. KB Raju Director More than two decades experience and leads corporate affairs of the group Mr. Tanmay Das Director More than 15 year experience in project finance, fund management and development of generation assets 6

7 Robust Demand Growth Robust Demand Growth Robust Demand Growth Power Sector The Growth Canvas ,002 FY09 FY10 FY11 FY12 FY13 FY14 Real GDP growth 6.7% 8.6% 8.9% 6.7% 4.5% 4.9% YoY power demand growth 5.1% 6.7% 3.8% 8.6% 5.9% 1.0% Energy demand (Twhs) ,002 Energy demand growth closely linked to GDP growth Pick-up in domestic economy could trigger energy demand growth 13,394 10,286 5,733 2,975 2,944 2,384 Consumption (kwh/year) US Australia UK World China Brazil India 879 Notwithstanding sustained demand, India continues to be among the lowest per capita consumers of electricity globally, lagging behind Brazil and China by ~3:1 Per capita consumption ~30% of the world average Peak Deficit Energy Deficit 11.9% 12.7% 9.8% 10.6% 9.0% 11.1% 10.1% 8.5% 8.5% 8.7% 4.5% 4.2% FY09 FY10 FY11 FY12 FY13 FY14 Power deficit scenario persists, though significant capacity addition and slowed down demand narrowed gap -4.2% energy deficit in FY14 (~42Twh) -4.5% peak deficit in FY14 (~6 GW) Source: Planning Commission CEA Report, GoI Economic Survey. 7

8 The Government got into action Prime Ministers office meets power sector Management for review of problems Decides to form a committee for timebound action Government issues Presidential Directive to Coal India to sign FSAs FSA to provide 80% supply to 60 GW capacity Government issues Second Presidential Directive to Coal India Limited Fuel Supply Agreement list expanded to 78 GW including tapering linkages CERC revises pre - determined tariff PPAs for 2 projects CERC issues final tariff norms for ; tightens norms, lowers RoE Jan -12 Apr -12 Jan-13 Apr -13 Jun -13 Jul -13 Feb-14 Committee of Secretaries (CoS) formed under Prime Ministers Office CoS to include secretaries of power, petro, coal, environment & finance ministries Cabinet Committee on Investments formed to extend efforts to remove bottlenecks Distribution companies financial restructuring norms finalized Multiple states participated, more may join Change in National Coal Distribution Policy CIL s supply commitment reduced from 100% to 65-80% till 2017 Imported coal would be a pass-through in PPAs Further acceleration required to resolve issues related to power sector CERC Central Electricity Regulatory Commission, CIL Coal India Limited, RoE Return on Equity, PPA Power Purchase Agreement 8

9 KSK Key Milestones Year Milestone 2014 KSK Mahanadi PPA with UP DISCOMS for 1000 MW power supplies KSK Mahanadi executed Fuel Supply Agreement for Tapering Coal Linkage 2013 KSK Mahanadi PPA with Tamil Nadu Utility MW, Chhattisgarh 225 MW First 600 MW Unit of KSK Mahanadi operational and power supplies commenced New Initiatives on Solar Power Generation 2012 KSK Mahanadi PPA with AP DISCOMS for 400 MW power supplies Wardha Power - Open Access for supplies to Industrial consumers and Fuel Supply Agreement with Western Coal Fields Limited 2011 Wardha Power fully operational supplies to Reliance-infra Discom commences KSK plc completes an Open Offer to acquire additional 20% of Indian listed subsidiary, KSK Energy Ventures Limited shareholding goes upto 74.94% Arasmeta Expansion unit of 43 MW commences power generation 2010 KSK Mahanadi PPA with GUVNL for 1010 MW of Power supplies VS Lignite power plant commissioned 2009 Coal supply agreement entered with GIDC for proposed 1800 MW Power project in Chhattisgarh, KSK Mahanadi capacity enhanced to 3600 MW Implementation Agreement signed with Government of Chhattisgarh for KSK Mahanadi project 2008 KSK Energy Ventures Initial public offering of Shares, raising approx US$ 290 mn, KSK Power Ventur plc stake at 55.25% Sai Regency power plant synchronized with the grid 2006 Arasmeta power plant synchronized with the grid Collaborative MOU s with Government mining companies for long term coal supply arrangements signed - Execution of a coal supply and investment agreement with GMDC for supplies to proposed 1800 MW Chhattisgarh project KSK Power Ventur plc lists on AIM Market of London Stock Exchange GMDC Gujarat Mineral development Commission, GIDC Goa Industrial Development Corporation, GUVNL Gujarat Urja Vikas Nigam Limited 9

10 KSK Business Strategy and Response Secure Fuel Access attempts for sustained generation Power purchase Agreements Arasmeta and Sitapuram - Coal linkages from SECL /SCCL Sai Regency Natural Gas from GAIL (India) Limited VS Lignite - captive lignite block Sai Wardha Power Linkage with Western Coal Fields on cost plus basis KSK Mahanadi - Collaboration with State Mineral Development Corporations for dedicated coal block supplies Tapering coal linkage from CIL subsidiaries in the interim period New PPA signed by KSK Mahanadi with TANGEDCO for 500 MW and UPPCL for 1000MW Industrial supply PPAs under captive consumer model Wardha Warora - challenges of open access and alternative PPA tie-ups being addressed Enabling Support Infrastructure Power generation de-licensed but support sectors continue under government control and limited pace of progress At KSK Mahanadi - supplement generation initiatives of KSK Energy Ventures Limited with pursuit of necessary utilities of railway, water and transport infrastructure through SPVs under KSK Energy Company 10

11 KSK Mahanadi (3600 MW) Brief Overview KSK Mahanadi, (Chattisgarh) MW consists of 6 units, each of 600 MW. Project Construction over last 4 years First 600 MW commissioned in 2013 Second unit of 600 MW (expected to commission during 2014) Balance units to follow Support Infrastructure commissioned Water transportation pipeline commissioned Railway siding and line from main trunk line into power plant commissioned Evacuation infrastructure in place and power supplies commenced Fuel Progress Morga-II Forest clearance for prospecting achieved Gare Pelma Stage II forest clearance obtained and mining to commence Tapering Linkage Fuel Supply Agreement USD/INR Depreciation Depreciation of the INR against the USD affecting equipment supplies cost at INR level - balance four units necessitating enhanced debt External Commercial Borrowing (ECB) being pursued to substitute part of the INR Project Finance Debt 11

12 KSK Mahanadi EPC Approach #7 #1 #2 #3 #4 #5 #6 #8 #9 Differentiated EPC String Approach the core units (i.e. #3, #4) are commissioned first and then the other units are taken up for commissioning thereafter. This also necessitates setup and construction of common infrastructure for each three units block ( # 7 and #8) as well as for all the six units ( #9). This approach though entails significant initial capital expenditure, ensures easier and faster access to materials & common infrastructure setup at the construction site 12

13 KSK Mahanadi Fuel Access Morga II coal block Fuel Block Tie up SECL Linkage Status Tapering Linkage End Use Power Plant Morga II (GMDC) Gare Pelma III (GIDC) 350 MT 210 MT Fuel supply agreement completed KSK Mahanadi 3.6 GW Gare Pelma - III coal block Independent coal collaboration and mine development initiatives including procurement of imported coal in interim KSK Mahanadi Power Plant 13

14 KSK Mahanadi PPA Approach Gujarat Chhattisgarh Goa* Morga II based Supply PPA 1010 MW 5%/7.5% Supply PPA 225 MW Gare pelma supplies based PPA AP Distribution companies** Medium term PPA 400 MW UP Tamil Nadu Case I Competitive bid PPA 1000 MW Case I Competitive bid PPA 500 MW *PPA to be executed shortly tariff under Central Electricity Regulatory Commission mechanism ** supplies between 2013 to

15 Wardha Power 540 MW Wardha Warora, (Maharashtra) MW Coal It consists of 4 units, each of 135 MW. Unit I & II for utility sales and part sale to multiple industrial consumers from unit III & IV Commenced Unit wise generation during 2010 and 2011 Generation PLF: 60 % PLF: 72 % PLF: 55 % PPA arrangements Longer term PPA with industrial customers for part capacity Medium term PPA (Apr 2011 to Mar 2014 ) with Reliance-Infra (Distribution licensee) Fresh arrangements under pursuit Fuel supply arrangements Long term source cost plus coal block linkage from Western Coalfields Limited FSA for MTPA as against Linkage quantity of 2.26 MTPA Price, quality and other conditions before Competition Commission of India Interim open market / imported coal 15

16 VS Lignite 135 MW & Sai Maithili 10 MW VS Lignite (Rajasthan) 135 MW Lignite Commenced generation during 2010 Power purchases by multiple industrial consumers in Rajasthan and balance power to local utility PLF: 63 % PLF: 78% PLF: 75% PLF: 76% Gurha (E) Captive Lignite Block allotted in July 2005 Lignite mine - Gurha (E) with reserves of 22 MT Sai Maithili (Rajasthan) 10 MW Solar Sai Maithili Solar unit of 10 MW under Jawaharlal Nehru National Solar Mission Initial Funding by IDBI Bank Limited, US Exim Funding tied up RBI approval under pursuit PLF: 21% 16

17 Arasmeta 86 MW Arasmeta (Chattisgarh) - 86 MW (2 x 43 MW) Coal Phase I in operation since 2006, Phase II commissioned in 2011 Initial Power purchases by Lafarge India PLF: 84 % PLF: 82 % PLF: 49 % PLF: 59 % PLF: 45 % PPA with Lafarge not renewed post Dec 2013 Power Purchases by Chhattisgarh state utility commenced under long term PPA PPA approved by Chhattisgarh State Electricity Regulatory Commission in May

18 Sai Regency 58 MW, Sitapuram Power 43 MW Sai Regency Power (Tamil Nadu) - 58MW Natural gas CCGT asset In operation since PLF: 71 % PLF: 87 % PLF: 89 % PLF: 84 % PLF: 88% Supplies to multiple Industrial customers in Tamil Nadu Gas supplies by GAIL under FSAs from Ramnad zone PPA with fuel cost pass-through formulae Sitapuram (Andhra Pradesh) 43 MW Coal In operation since PLF: 86 % PLF: 77 % PLF: 68 % PLF: 89 % PLF: 91% Power Purchases by Zuari Cements and surplus to local utility 18

19 Mn Units Avg Tariff (Rs/ kwh) Operation Performance of Power Project Portfolio Generation and Tariff (Rs /kwh) FY09 FY10 FY11 FY12 FY13 FY14 0 MU Generated MU Sold Avg Tariff (Rs./ kwh) * Based on audited financial statements 19

20 Key Strengths Strong execution track record with a combination of outsourced captive power plants and IPP s with well demonstrated growth path Large installed capacity scale up (144 MW at IPO to 1472 MW currently) Proven development expertise Attractive PPA tie-ups Recent PPA tie-ups with UP Discoms and TANGEDCO significant amongst the PPAs pursuant to Case-1 bidding format in India Strong Domestic Coal focused power generation generation supported with adequate fuel tie-ups and cost advantage Key projects to drive majority of incremental cash flows 540 MW Wardha project cash flows upon better utilization, addressing fuel price, PPA arrangements and Open access issues 3.6 GW KSK Mahanadi project 1.2 GW along with common infrastructure significantly done 20

21 KSK Energy Company Support Infrastructure KSK Energy Limited, Mauritius 67.6%* 100 % KSK Energy Ventures Limited ( KSKEV ) KSK Mahanadi Power Company Limited (3.6 GW) Contractual agreements *Balance 32.4 % held by various public shareholders at BSE/NSE listed KSKEV KSK Energy Company ( KECPL ) KSK Mineral Resources Private Limited Raigarh Champa Rail Infrastructure Private Limited KSK Water Infrastructure Private Limited KSK Mahanadi Power project company constructing the 3.6 GW power plant at Nariyara, Chhattisgarh 6 units of 600 MW each, with independent unit wise commissioning Raigarh Champa Rail Infrastructure Rail connectivity and transportation infrastructure between Coal blocks and KSK Mahanadi power plant KSK Water Infrastructure Water transportation and storage infrastructure between Mahanadi river and KSK Mahanadi power plant KSK Mineral Resources Development support of Gare-Pelma coal block of GIDC 21

22 KSK Water Infrastructure Project Authorization: Chhattisgarh Government for water allocation, right of way and land for intermediate storage Nature of activities: Land acquisition, construction, pumping and pipeline facilities, intermediate storage, two pumping stations along with river anicuts Revenue Model: Cost plus Line I km River intake at Basantpur to common pipeline Junction Line II 1.1 km River intake at Seorinarayan to common water pipeline junction Line III km Common water pipeline junction to intermediate reservoir Line IV km Intermediate reservoir to power plant Pipeline Entire 60 km pipeline laying work completed and currently used for water transport Intermediate Reservoir Water storage reservoir with 7 MCM capacity and spread over 270 acres of land mid way between river and power project under progress 22

23 Raigarh Champa rail connection for fuel supplies Incorporation: May 2009 for coal transportation facilities from mines to power project Nature of activities: Land acquisition, construction of rail lines, loading and unloading facilities, shunting locomotive along with safety and signaling infrastructure Construction: Raigarh Champa with subcontractors Revenue Model: Cost plus Stage I 15.7km + siding The first leg of 15.7 Km connects the power project to the main railway line enabling coal and fuel oil transport to the plant The inward line operation has already commenced Stage II 65.5km The second leg of 65.5 Km connects Gare Pelma coal block in Mand Raigarh coalfield to the main rail route. Handling capacity of 24 MTPA far exceeding KSK s requirements Construction of this phase expected over next months Stage I Connectivity of power plant with Indian rail network completed and movement of rakes into the plant commenced 23

24 KSK Mineral Resources Mine: Gare Pelma III Mine Owner: Goa Industrial Development Corporation ( GIDC ) Mine Developer & operator: KSK Mineral Resources consortium Nature of activities: Technical studies, facilitation of mine plan / mine lease, land acquisition etc Revenue Model: Cost plus assured return GIDC was allotted the coal block in November 2008 with Geological Reserves of 210 MT Mine plan approval was obtained in May 2010, forest clearance from Ministry of Environment & Forest (Stage I) obtained in April 2011 and stage II in early 2013 Mining Contractor appointment notified and Lease anticipated to be executed shortly by GIDC KSK Mineral facilitating GIDC in coal block development - coal production commencement anticipated in the short term 24

25 Sustainability Initiatives State of art Hospital at Raipur over 3000 consultations and cardiac surgeries, free of cost performed already 25

26 Thank you 26 26