Ratnagiri Gas to split LNG, Power businesses for restart
Ratnagiri Gas & Power Pvt., which owns a liquefied natural gas terminal and an adjoining power plant built by the now-defunct Enron Corp. on India’s west coast, will split the businesses as part of a revival plan.
The power plant, which has an installed capacity of 1,967 megawatts and has been lying shuttered since last year due to a lack of affordable gas, will resume generating electricity from 1 November, Power minister Piyush Goyal told reporters in New Delhi on Wednesday. Indian Railways has agreed to buy 500 megawatts from the project, he said.
“All issues related to Ratnagiri Gas & Power are resolved and it will be able to service its debt,” Goyal said.
Revival of the plant will boost investor confidence in the nation’s power sector, which is contending with low capacity use, stranded assets and unprofitable state retailers. The restart is also crucial to fulfilling Prime Minister Narendra Modi’s pledge of providing electricity to all in a country where more than half the population has no access to power.
Ratnagiri Gas & Power has a debt of about Rs9,000 crore ($1.4 billion), taken from lenders including IDBI Bank Ltd., State Bank of India Ltd. and ICICI Bank Ltd., according to Parag Jariwala, an analyst at Religare Capital Markets Ltd. The lenders had earlier converted Rs400 crore of debt into equity and now own about 20% in the company, he wrote in a e-mailed note Wednesday.
“The development is positive for banks as it will reduce their asset-quality risk,” Jariwala said in the note.