The company's joint venture with SUN Group selects sites for hydropower plants OJSC HydroWGC and India's SUN Group intend to construct several hydropower plants in India. HydroWGC is going to approve the development strategy of its joint venture with SUN in the second quarter of this year. Both companies view construction of hydropower plants in India as a promising undertaking; however, experts warn that it may take up to 20 years before these plants break even. OJSC HydroWGC's JV with India's SUN intends to take part in tenders for acquisition of cross sections on the Indian rivers, member of the company's Management Board Vasily Zubakin told Kommersant. Within the framework of the Indian state program on construction of 50 MW of power capacity by 2017, the government is offering for tender 164 cross sections for hydropower plant construction. "In the second quarter of the year, the JV's development strategy will be submitted for approval to the HydroWGC's Board of Directors", says Vasily Zubakin, "and then we will proceed with selection of cross sections and participate in the tenders". An agreement on establishing a JV between the Russian company and SUN was signed last summer; however, the form of cooperation between the companies was not finalized at that point. Manager for SUN's investment projects Vyacheslav Barabash has confirmed to Kommersant the plans for construction of hydropower plants on Indian rivers. A project company will be set up for each plant, and the construction works will be financed on the basis of project financing, specified Mr. Zubakin. Loans are to be raised with state-owned Indian banks; however, for the interest to be at the level of 4-5% per annum, at least 50% of the plants' future output must be contracted in advance for long-term periods. Up to 50% of the new plants' capacity will be offered in the free market. According to the top manager, the cost of production of 1 kW/hour by an Indian hydropower plant is about INR 1.5 (roughly RUR 1), while the average price of 1 kW/hour under a mid-term contract amounts to INR 2.5 and the tariff for households is fixed at approximately INR 5-6 per 1 kW/hour. |
