Binjkote power station

From Global Energy Monitor

Binjkote power station is a 600-megawatt (MW) coal plant in Chhattisgarh, India. It is also referred to as the Raigarh power station (SKS Ispat).

An additional 600 MW of coal capacity was proposed, but the two units are presumed cancelled.

The power station is a stressed asset undergoing ownership changes.

Location

Satellite photos showed two units under construction, as does the October 2016 Broad Status Report.[1]

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Background

The project received environmental clearance from the Ministry of Environment and Forests (MoEF) on October 5, 2010. According to the clearance, the project is located at villages Binjkot and Darramura, in Karsia taluk, in Raigarh district. Land requirement will be 874 acres, including 664 acres of agricultural land and 24.67 acres of double-crop agricultural land. Coal linkage has been obtained from the Fatehpur Coal Blck. Water allocation has been obtained from the Mahanadi River. No forest land is located on the project site; however, a number of reserve projects are located within 10 km.[2]

According to a September 2013 news report, land area for the plant had been reduced by the Ministry of Environment and Forest (MoEF) from 874 acres to 568.668 acres.[3][4]

In 2014, it was reported that commissioning of the power station would likely be delayed to after July 2015 due to issues with coal supply linkages.[5]

In July 2015, SKS power said that it was looking for a new investor to raise additional debts and keep the project alive, as private equity investor Blackstone had pulled out of the project in January 2014, and project cost escalations was crippling SKS finances. The SKS annual report for 2013-14 noted the project costs for the project's first phase (2×300 MW) had risen to Rs 4,750 crore, whereas the entire project cost (4×300 MW) of the plant had been earlier estimated at Rs 5,100 crore. The company has managed to complete 70% of phase-I of the project, its annual report for FY14 noted. It is uncertain if the revised commissioning date of July 2015 for phase-I and September 2015 for phase-II will be attained.[6] Environmental clearance was renewed on March 4, 2016.[7]

Unit 1 was commissioned on 25 April 2017.[8] As of November 2017, the unit is still not in commercial operation due to a lack of coal.[9]

The India government projects unit 2 will be commissioned in November 2017.[10][11]

Unit 2 was synchronized in December 2017 and was planned for commissioning in 2018.[9] Unit 2 was commissioned in March 2018.[12]

In 2017, Units 3 and 4 were still not under construction, as the company was still acquiring land for their operation[9] and was facing financial problems.[13]

In 2021, the Central Electricity Authority noted the following about the units: "Due to non-availability of Long – Term PPA’S, lenders are not sanctioning any fresh loans. Due to funds constraint developer is not in a position to implement balance 2*300 MW BTG at this point of time."[14]

Units 3 & 4 were presumed cancelled.

Mothballed units revived

During a May 2022 heatwave, energy minister RK Singh held conferences with companies, banks, and state officials to discuss restarting commissioned but “non-operational” units.[15]

In May 2022, to "tackle the power crisis," it was decided that NTPC would be entrusted to operate the 2 x 300 MW plant.[16] Lenders, especially the two state-run, dedicated power sector financiers, Power Finance Corp (PFC) and REC, had been seriously considering bidding for the stressed power asset to prevent large "haircuts" on their loans during resolutions. They had even proposed to float a consortium of lenders and state-run power sector entities (CPSEs) with technical know-how in the sector, to acquire and operate such stressed assets, sources said.[17]

In July 2022, SKS Power Generation reportedly became the first dormant power plant to start operations following a directive by the central government. State-owned National Thermal Power Corp (NTPC) had been tasked with operating and maintaining the plant until lead lender Bank of Baroda (BoB) found a buyer. Additional updates are listed below.[18]

Financing

As of March 2018, the project had received a total of US$663,425,563 in loans. US$563,477,762 in loans was provided by the State Bank of India and US$99,936,669 was provided by L&T Infrastructure Finance Company and PTC (India) Financial Services.[19]

Stressed asset, ownership change

In June 2018, a consortium of lenders led by the State Bank of India (SBI) put the Binjkote power station on sale. The total principal outstanding, as on March 31, stood at Rs 4,892 crore, of which SBI’s exposure was Rs 4,155 crore. SBI Capital Markets has been appointed by SBI on behalf of the consortium to invite proposals through a bidding process and identify an investor for acquisition of at least 51% share in the company.[13]

The plant had been unable to secure a long-term PPA or coal linkage. It sourced coal through e-auction and from the open market.[13]

In November 2018, Agritrade Resources Ltd, a Singapore-headquartered and Hong Kong-listed company, agreed to acquire SKS Power Generation (Chhattisgarh) Ltd as well as some of its loans for a total of Rs 2,170 crore ($300 million). Agritrade, with presence mainly in mining, shipping and energy, said in a release the proposed acquisition represented a diversification opportunity for the company to expand into thermal power.[20] The purchase appeared complete in 2019.[21]

In early 2022, the plant's situation was summarized as follows:

"The SKS Power project had entered into a power purchase agreement (PPA) with Chhattisgarh State Power Trading Company to supply 5% of the net energy generated at the plant at energy charges, and had also secured short-term PPAs with a few other discoms. It had also entered into a medium-term PPA with Noida Power Company, but had failed to enter into any long-term PPA, due to which the plant could not source linkage coal. As a result, it was sourcing coal through e-auction and from the open market, which led to cost escalation and uncertainty. In fact, the lack of PPAs and other structural issues has led to many power projects defaulting on loan repayment obligations."[17]

July 2022 updates

In July 2022, an Economic Times article provided various updates about the plant's situation:[18]

  • "The company is undergoing a corporate insolvency and resolution process (CIRP) since April 2022 and owes lenders led by BoB a total of ₹1,890 crore."
  • "The plant has 25 years of fuel agreement with SECL (South Eastern Coalfields Ltd), a Coal India arm."
  • "As part of the agreement with NTPC 300 MW generation has already been started and another 300 MW will start in a month. The company has 200 MW of power purchase agreement already with Rajasthan, Bihar and Chhattisgarh and the rest will be sold in the open market which will help reduce power shortages in India, the first person aware of the deal said."
  • "The plant stopped production earlier this year after Hong Kong listed owner Agritrade Resources failed to keep the plant running due to financial difficulties of its own."
  • "Agritrade itself had bought the plant in 2019 in a one-time settlement with a group of lenders led by State Bank of India (SBI)."
  • "The plant has both fuel and purchase agreements and only needed some infusion of funds to start operations which BoB has provided with a ₹125 crore funding."
  • "NTPC officials have already done all technical evaluations and have been contracted to operate the plant for six months for a fee which can be extended depending on how long the CIRP process takes (...)."
  • "Bankers are simultaneously finding a buyer for SKS through the CIRP and will seek expressions of interest from prospective buyers as early as Tuesday. BoB Capital Markets is the sole process advisor to the transaction. Bankers are hoping that a running plant with all agreements in place will give them better valuations for their dues."

Permitting and impacts

Hearings

According to the India Ministry of the Environment and Forests, a public hearing for the project was conducted on July 17, 2010.[2]

Air pollution

The project will include "high efficiency electrostatic precipitators." No flue-gas desulfurization (FGD) equipment is required, but the 275 meter stack will be provided with "continuous online monitoring equipments for SOx, NOx, and particulate matter (PM2.5 and PR10, and mercury emissions from the stack "may also [be] monitored on periodic basis."[2]

Fly ash and bottom ash

According to the MoEF letter, "Ash pond shall be moved away from side facing river and a thick three tier green belt shall be developed on the western side of the ash pond. Area of reservoir shall be restricted to 75 acres. Utilization of 100% fly ash generated shall be made from 4th year of operation of the plant.... Fly ash shall be collected in dry form and storage facility (silos) shall be provided. Un-utilized fly ash shall be disposed off in the ash pond in the form of slurry. Mercury and other heavy metals (As, Hg, Cr, Pb etc.) will be monitored in the bottom ash as also in the effluents emanating from the existing ash pond. No ash shall be disposed of in low lying area. Ash pond shall be lined with HDPE/LDPE lining or any other suitable impermeable media such that no leachate takes place at any point in time. Adequate safety measures shall also be implemented to protect the ash dike from getting breached."[2]

Environmental monitoring and public information

According to the MoEF letter, "Project proponent will up-load the compliance status in their website and up-date the same from time to time at least six monthly basis. Criteria pollutants levels including NOx (from stack 7 ambient air) shall be displayed at the main gate of the power plant.[2]

Water

According to the MoEF letter, "Source sustainability study of water requirement shall be carried out by an institute of repute. The study shall also specify the source of water for meeting the requirement during lean season. The report shall be submitted to the Regional Office of the Ministry within six months. No ground water shall be extracted for use in operation of the power plant even in lean season. Hydro geological study of the area shall be reviewed annually and report submitted to the Ministry. No water bodies including natural drainage system in the area shall be disturbed due to activities associated with the setting up / operation of the power plant. COC of 6.0 shall be adopted. The treated effluents conforming to the prescribed standards only shall be re-circulated and reused within the plant. There shall be no discharge outside the plant boundary except during monsoon. Arrangements shall be made that effluents and storm water do not get mixed."[2]

Coal supply delayed

According to a September 2013 news report, the company had not yet entered into a fuel supply pact with Coal India.[3] By 2015 the SKS Ispat and Power Ltd website said that it had signed a coal supply agreement with South Eastern Coalfields Ltd.[6]

Project Details

Sponsor: SKS Power Generation (previously SKS Ispat and Power)
Parent: Agritrade Resources Limited
Location: Binjkote and Darramura villages, Kharsia taluk, Raigarh district, Chhattisgarh
Coordinates: 22.010422, 83.205779 [2](exact)
Status: Units 1-2: Operating; Units 3-4: Cancelled
Nameplate capacity: 1200 MW (4 x 300 MW)
Type: Subcritical
Start date: 2017 (Unit 1), 2018 (Unit 2)
Coal Source: Domestic
Estimated annual CO2:
Source of financing: US$563,477,762 in debt from the State Bank of India; US$99,936,669 in debt from L&T Infrastructure Finance Company and PTC (India) Financial Services[19]
Permits: "Environmental Clearance," India MoEF, October 5, 2010; EC extension, India MoEF, March 4, 2016

Resources and articles

References

  1. "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, October 2016
  2. 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Environmental clearance letter, MoEF to SKS Power Generation (Chhattisgarh) Ltd., October 5, 2010
  3. 3.0 3.1 "Power plants like Lanco, DVC yet to sign FSA with Coal India," Economic Times, September 13, 2013
  4. Monthly Report on Broad Status of Thermal Power Projects in the Country, Central Electricity Authority, September 2013
  5. " Coal linkage to some of 11th Plan power projects may be revoked," PM News Bureau, June 20, 2014
  6. 6.0 6.1 "SKS Power seeks new investors for Chhattisgarh plant," Financial Express, July 26, 2015
  7. EC extension, India MoEF, 4 Mar 2016
  8. "Broad Status Report," India Central Electrical Authority, April 2017
  9. 9.0 9.1 9.2 "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, November 2017
  10. "Monthly Report on Broad Status of Thermal Power Projects in the Country," India CEA, November 2015
  11. "Monthly Report on Broad Status of Thermal Power Projects in the Country," Government of India Ministry of Power, March 2016
  12. "Installed capacity," India CEA, 31.03.2018
  13. 13.0 13.1 13.2 "Stressed asset: Lenders put SKS Power plant with Rs 5k crore exposure on sale," FE, June 6, 2018
  14. “Broad Status Report,” Thermal Project Monitoring Division , Central Electricity Authority, November 2021
  15. “Power Minister RK Singh to meet states, lenders on reviving stressed plants,” Economic Times, May 2, 2022
  16. "Power crisis forces states to pay dues," Times of India, May 11, 2022
  17. 17.0 17.1 "Tackling power crisis: NTPC to run two stressed plants on O&M basis," Financial Express, May 10, 2022
  18. 18.0 18.1 "SKS Power's dormant plant restarts operations under NTPC," Economic Times, July 11, 2022
  19. 19.0 19.1 "India Stressed Asset Revival: SKS Power's Binjkote Thermal Power Plant". numerical.co.in. February 25, 2019.
  20. "Singapore's Agritrade Resources to acquire SKS Power Generation," VCCircle, November 15, 2018
  21. "Agritrade Resources Announces Completion of Acquisition of Entire Issued Share Capital of SKS Power Generation (Chhattisgarh) Limited," PR Newswire Asia, March 18, 2019

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