JSW group tackles risks faced by its power projects

JSW Techno has revealed to investors the risks faced by its group company JSW Energy in the latter’s quest to become a major force in power generation.

The risks discussed include uncertainty about the merchant power segment in India, project financing, arranging fuel linkages, impact of spot prices on its two power plants, outcome of ongoing litigation and regulatory flux in general.

The private utility currently has four projects aggregating 8,420 MW of capacity under development and another 3,650 MW capacity which is either operational, or under construction.

"While it is in the process of arranging for financing of its projects from various banks and financial institutions, there is no assurance that it will be able to arrange financing on acceptable terms of at all. Other sources of financing may not be available and JSW Energy may not be able to obtain the capital necessary to fund its projects," says JSW.

JSW also contended that it may not be able to source additional coal from its fuel linkages or from other sources which will be required if its power projects are operated at higher PLFs. The company, which is also dependent on imported coal for fuel, will be impacted incase of any fluctuations in fuel prices or renegotiations.