KSK Mahanadi Power Project

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KSK Mahanadi Power Project, also known as Akaltara TPP or Nariyara TPP, is a 1,800-megawatt (MW) coal-fired power station in Chhattisgarh, India.

An additional 1,800 MW of coal capacity is under development, although it has been affected by National Company Law Tribunal (NCLT) insolvency proceedings.

Location

The satellite photo below shows the power station about 4 km northwest of Nariyara village, Janjgir-Champa district, Chhattisgarh, India.

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Background

In 2011, KSK Energy Ventures stated on its website that "the original project was a 1,800 MW power project based on coal supplies from the Morga-II coal block by GMDC. With the availability of additional fuel from the Gare Pelma Sector III coal block in Chhattisgarh, the KSK Mahanadi Power Project has been expanded through the fast track development of an additional 1,800 MW of power generation capacity in the same location. This power project of 3600 MW is being setup in a single location and is scheduled to be commissioned on a unit-wise basis through 2012 and 2013." The company also stated that "seven million tonnes of coal per annum will be sourced from GMDC's Morga-II coal block in Chhattisgarh and a further seven million tonnes per annum from GIDC's Gare Pelma Sector III coal mines." SEPCO of China had been selected to design and construct the power station.[1]

In June 2014, the Central Electricity Authority reported that Unit 1 was commissioned August 14, 2013 and Units 2-6, each 600 MW, were under construction, with completion dates not specified.[2]

On its website (2015), KSK lists the second unit as commissioned in August 2014, and the remainder planned for 2015. However, the company also states that it has faced uncertainty over securing coal supplies, relying on a mix of sources.[3]

In November 2015 the India government stated the power station will be completed in 2017-2018.[4] In July 2016 the estimated commissioning date was pushed back to 2018-2020 for units 3-4, while commissioning for units 5-6 was labelled "uncertain."[5]

Environmental clearance for the plant was extended in May 2016.[6]

As of December 2016, it appears that Units 3-6 are either stalled or progressing at very slow speed. Little progress has been reported in the Broad Status Report since 2012, and the report states: "Coal blocks of Gujarat and Goa linked to the power project for [sic] cancelled by the Ministry of Coal on 30.06.13. Long term coal linkage is required for the power project, for which policy is under formulation with GOI." The report also states, "Delay due to shortage of manpower and agitations by Villagers. Supply of material due to shortage of funds."[7]

In May 2017, Piramal Enterprises and private equity fund Bain Capital Credit said they plan to acquire the KSK Mahanadi Power Project through their distressed asset investment platform.[8]

Unit 3 was synchronized in December 2017, with commissioning and operation planned for 2018.[9] Unit 3 was commissioned in January 2018.[10]

Units 4-6 delays & Insolvency proceedings

In its 2017 Annual Report, KSK Energy Ventures said unit 4 would be commissioned shortly after unit 3. KSK also warned progress on the last two units depended on "equity finance" and "fuel supply".[11] According to the India Ministry of Power, units 4-6 were planned for commissioning in 2019.[12]

The plant was considered one of India's 34 "stressed coal plant assets" in India. As of April 2019, its situation had not been resolved, with Adani Group declining to acquire the plant due to reduced tariffs for the power. KSK Mahanadi defaulted on bank loans worth Rs 21,760 crore as of March 2018. The company was expected to be referred to the National Company Law Tribunal (NCLT) for debt resolution.[13]

According to government documents, work has been on hold at the units since at least December 2019. Boiler erection at Unit 4 had reportedly started in 2011, at Unit 5 in 2012, and had yet to start at Unit 6 even though foundation work had been completed.[14]

In early 2021, Adani, Tata, Brookfield, and JSPL said they would not submit financial bids for KSK Mahanadi Power’s ultra-mega power plant unless its water and railway infrastructure were included in the sale, creating a hurdle in the company’s insolvency process.[15]

However, a petition by lenders to consolidate the resolution process of KSK Mahanadi and KSK Water and Raigarh Champa Rail was reportedly rejected by the tribunal in February 2021.[16]

In December 2021, SBI invited bids from asset reconstruction companies, and other financial institutions to sell an NPA account KSK Mahanadi Power Company, with total outstanding against the company standing over Rs 4,100 crore.[17]

In 2021 government documents, the Central Electricity Authority listed the following for the three units: "Admitted to NCLT on 03.01.2019; CIRP commenced on 3rd October 2019 & currently under NCLT."[18]

By May 2022, State Bank of India was set to sell its ₹3,815 crore outstanding loan from KSK Mahanadi Power to Aditya Birla Asset Reconstruction Company, which would help the bank shore up its earnings for the June quarter. "The timing of SBI's proposed loan sale of KSK Mahanadi indicates that lenders are no longer confident of timely resolution under the IBC-driven process," said a lender. KSK Mahanadi Power had been undergoing insolvency proceedings for over two and a half years.[19]

In terms of permitting, in May 2022, the Thermal Expert Appraisal Committee regranted Terms of Reference for the project and an exemption from public hearing for conducting EIA study to the project. A site visit concluded that project was 60% to 65% complete.[20]

Although construction does not appear to have progressed since at least 2019, the expansion is considered "under development" given recent permitting and financial activity.

Financing

In November 2010, a financing agreement was closed for the 3600-MW project. US$2672.04 million in loans will be provided by SBI Capital Markets, Axis Bank, Power Finance Corporation, State Bank of India, Union Bank of India, Punjab National Bank, United Bank of India, Canara Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Federal Bank of India, State Bank of Travancore, State Bank of Hyderabad, IDBI Bank, Rural Electrification Corp, Andhra Bank, Uco Bank, Indian Bank, Bank of India, Oriental Bank of Commerce, Life Insurance Corporation of India, Bank of Baroda, State Bank of Patiala, State Bank of Bikaner & Jaipur, Punjab & Sind Bank, and Housing and Urban Development Corp (Hudco). The financial advisor for the project is SBI Capital Markets. US$712.57 million in equity is being provided by the sponsor KSK Energy Ventures Limited.[21]

January 2011: Farmers beaten and detained following land protests

The KSK Mahanadi Power Project is in the Janjgir-Champa district of Chhattisgarh, an agricultural area where the state government has signed memoranda of understanding for 34 new thermal power plants totalling 34,000 MW, almost one-fourth of India's current thermal power capacity. Although the area lacks coal, it became a focal point for developers after neighboring Korba was listed as the fifth most polluted among the Critically Polluted Areas of India in 2009, leading the Ministry of Environment and Forests (MoEF) to impose a moratorium on further environmental clearances.[22] In an article entitled "Chhattisgarh: How to destroy a district," Prakhar Jain describes the conflicts over land acquired to build the plant:[22]

With good rail and road connectivity to coal-rich Odisha and Jharkhand, Janjgir-Champa is the least forested district in the state and was traditionally known for silk, brass and gold. It has now been bombarded with more than 100 new offers by various business houses. An estimated 40,000 acres, equal to half the area of capital city Raipur, is being acquired for thermal power plants alone. People who first sold the land to power companies at very low prices felt cheated later. Villages around Akaltara town are a classic example of this. KSK Energy Ventures, which is setting up a 3,600 MW power plant, paid Rs 1.2-2.3 lakh per acre when it first started acquiring land in 2008 through mediators. After the Chhattisgarh Revised Rehabilitation Policy came into force in 2010, the price per acre rose to Rs 6 lakh for barren land, Rs 8 lakh for single-crop unirrigated land and Rs 10 lakh for an acre of double-crop irrigated land. However, when in January 2011, farmers protested about influential families getting more than Rs 30 lakh per acre, villagers were beaten up by the police and detained. Still, the rates were revised to Rs 17 lakh per acre. By that time, there were very few farmers eligible for this increased compensation. Saurabh Singh, local MLA from the Bahujan Samaj Party, says that the farmers were also at fault. “How can we help when their land sale deed clearly says that the sale would not come under the Resettlement and Rehabilitation (R&R) policy of Chhattisgarh government?” he asks.

In January 2011, 25 farmers were reported to have been injured during the January protests. Early 100 farmers were arrested during a protest march when they allegedly attempted to storm the offices of KSK Energy Ventures.[23]

Akaltara was one of nine Ultra Mega Power Projects proposed by the government of India as part of a strategy to add an additional 100,000 megawatts of generation capacity by 2017. The 3,360 megawatt project is in the state of Charttisgarh,[24][25] and is being proposed by Akaltara Power.[26]

The Hindustan Times reported that of the 9 locations initially selected for Ultra Mega Power Project "three including Girye in Maharashtra, Akaltara in Chattisgarh and Tadri in Karnataka may have to be eventually abandoned. Despite being a pit head project, the Akaltara project has been dogged by coal linkage issues, while the Tadri project has been delayed due to various reasons, including the unstable political situation in Karnataka."[27]

A 2006 Ministry of Power overview of the proposed Ultra-Mega projects states that "the site for the project has been identified in association with the CSEB officials. CEA has written to Govt. of Chattisgarh on 16th January 2006 to confirm the availability of land and water at the identified site to enable the shell company to issue the expression of interest for the project.. Ministry of Power has requested Ministry of coal to allocate captive coal block from Korba coal fields. In its meeting of Energy Coordination Committee held on 8th February, 2006 under the chairmanship of hon’ble Prime Minister, it was decided that the Ministry of Coal would allocate the needed coal blocks by 28th February, 2006. A technical consultant for the preparation of project report has been selected. The consultants will commence work after receipt of confirmation from the state government."[28]

The Ministry of Power also identified three issues that needed to be resolved with the government of Chattisgarh before the project could proceed. These were:[29]

  • "Chattisgarh Government is required to sent the consent for water, land, Power off-take and equity participation";
  • "12% free power demanded by Chhattisgarh is unreasonable. This needs to be withdrawn"; and
  • "Allocation of entire 4000 MW to Chhattisgarh is not feasible as these projects are being developed as Inter State projects."

Opposition

On Monday, January 14, 2013, around a hundred people protested the KSK Mahanadi power plant in Nariyara village. 75 of those villagers were arrested. On January 20, 2013, the arrested villagers started a hunger-strike within the jail. The villagers claim that the company in charge of the power plant, KSK Mahanadi Power Company, had acquired their land without paying compensation.[30]

In September 2014, there were protests against the KSK Mahanadi Power Company over not providing enough jobs or facilities to the community of the land they acquired.[31]

In May and June 2016, various protests occurred by the community members of the KSK Mahanadi power plant, citing how the promised jobs by the company were never given to the villagers. The Congress Party has reportedly continuously been bringing these issues of land acquisition and lack of employment from time to time.[32]

Project Details

Sponsor: KSK Energy Ventures
Location: Nariyara village, Akaltara tehsil, Janjgir-Champa district, Chhattisgarh
Coordinates: 21.9602956, 82.4090642 (exact)
Status:

  • Unit 1: Operating (August 2013)[33]
  • Unit 2: Operating (August 2014)
  • Unit 3: Operating (January 2018)
  • Units 4-6: Construction

Nameplate capacity: 3,600 MW (Units 1-6: 600 MW)
Type: Ultra Mega Power Project
Projected in service: 2021-2022[34]
Coal Type:
Coal Source: Domestic and imported coal
Source of financing: US$2672.04 million in debt from SBI Capital Markets, Axis Bank, Power Finance Corporation, State Bank of India, Union Bank of India, Punjab National Bank, United Bank of India, Canara Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Federal Bank of India, State Bank of Travancore, State Bank of Hyderabad, IDBI Bank, Rural Electrification Corp, Andhra Bank, Uco Bank, Indian Bank, Bank of India, Oriental Bank of Commerce, Life Insurance Corporation of India, Bank of Baroda, State Bank of Patiala, State Bank of Bikaner & Jaipur, Punjab & Sind Bank, and Housing and Urban Development Corp (Hudco); US$712.57 million in equity from KSK Energy Ventures Limited[21]
Permits and applications: Environmental clearance extension, India MoEF, May 26, 2016

Articles and resources

References

  1. KSK Energy Ventures, "Thermal Power Plants", KSK Energy Ventures website, accessed May 2011, Archived Oct. 6, 2011
  2. Monthly Report on Broad Status of Thermal Power Projects in the Country, Central Electricity Authority, June 2014
  3. "Thermal power plants," KSK, accessed March 2015
  4. "Monthly Report on Broad Status of Thermal Power Projects in the Country," India CEA, November 2015
  5. "Monthly Report on Broad Status of Thermal Power Projects in the Country," India CEA, July 2016
  6. Environmental clearance, India MoEF, May 26, 2016
  7. "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, October 2016
  8. "Piramal-Bain Capital unit in talks to buy KSK’s Mahanadi project," Live Mint, May 16, 2017
  9. "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, December 2017
  10. "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, January 2018
  11. Annual Report 2017, KSK Energy Ventures, August 2017
  12. "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, August 2018
  13. "Adani Power withdraws offer to acquire KSK Mahanadi project in Chhattisgarh," Business Standard, April 19, 2019
  14. "Broad Status Report," India CEA, December 2019
  15. "KSK Mahanadi’s insolvency in limbo as 4 bidders back out," The Economic Times, January 8, 2021
  16. "PNB looking to sell KSK Mahanadi loan worth Rs1,719.85 crore to ARCs," Live Mint, August 17, 2021
  17. "SBI invites bids to auction KSK Mahanadi Power NPA account with dues over Rs 4,100 cr," Business Today, December 5, 2021
  18. “Broad Status Report,” Thermal Project Monitoring Division , Central Electricity Authority, November 2021
  19. "SBI sells Rs 3,815 crore KSK Mahanadi loan to Aditya Birla ARC," Economic Times, May 31, 2022
  20. "24th Thermal EAC Meeting Minutes," MOEF, May 9, 2022
  21. 21.0 21.1 "Preview of KSK Thermal Power Project (3600MW) | Transaction | IJGlobal". ijglobal.com. Retrieved 2020-09-18.
  22. 22.0 22.1 Prakhar Jain, "Chhattisgarh: How to destroy a district," Tehelka Magazine, January 21, 2012
  23. Aman Sethi, "Power plants insulated from protests, villagers shocked," The Hindu, February 5, 2011
  24. Rebecca Petchey, Michael Lampard and Alan Copeland, Thermal coal", Australian commodities, ABARE, Volume 17 number 1, March quarter 2010, page 155.
  25. Amiti Sen & Subhash Narayan, "States make case for second UMPP with advanced land clearances", Economic Times, (India), March 20, 2010.
  26. Centre for Monitoring Indian Economy, Untitled, Ministry of Commerce & Industry, Government of India, May 2008.
  27. Samiran Saha and Gaurav Choudhury, "Giriye power project: Mango farmers not to give up land", Hindustan Times, November 25, 2007.
  28. Ministry of Power, "Development of Ultra Mega Power Projects", Government of India, February 2006, page 9.
  29. Ministry of Power, "Development of Ultra Mega Power Projects", Government of India, February 2006, page 10.
  30. “Chhattisgarh Police arrests 75 for protesting against power plant”, Business Standard, January 20, 2013.
  31. “KSK Mahanadi Power Company Ltd.”, Land Conflict Watch, October 6, 2019.
  32. “KSK Mahanadi Power Company Ltd.”, Land Conflict Watch, October 6, 2019.
  33. Monthly Report on Broad Status of Thermal Power Projects in the Country, Central Electricity Authority, November 2013
  34. "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, November 2019

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