India Ratings assigns AAA rating to NHAI’s FY18 borrowing plan
With government pushing infrastructure development by way of developing world class roads, National Highways Authority of India (NHAI) has geared up to borrow Rs 59,000 crore through a string of instruments including bonds during the current financial year (2017-18). The authority has been given AAA rating and a stable outlook by India Ratings and Research. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. NHAI, being the sole agency responsible for the development of national highways in India, is strategically important to the government. Its fundamental purpose is to improve the national road transit infrastructure, better serve the national economy, and improve the country’s standard of living, the rating agency said in a release. Strong federal control, with the government monitoring its annual budget (including borrowings) and operational performance, support the ratings. The government provides substantial support to NHAI through fuel cess and grants. Fuel cess remains the major source of the authority’s finances. NHAI is also allowed by the central government to raise finances at competitive rates through bond issuances under Section 54EC of the Income Tax Act. These bonds allow investors to secure tax exemption on the capital gains earned on the sale of assets and are open for subscription throughout the year. NHAI completed construction of 80.44% of its targeted stretches by end-January in FY’17 and achieved construction efficiency of 6.57km/day. Although the pace of highway construction grew 20.7% on-year in FY’17, it is still lower than 7.8km per day achieved in FY’13. The rating agency is of the view that the pace of construction will accelerate in coming years due to the sustained focus of the Ministry of Road Transport and Highways on this sector, award of most of new road projects on the engineering, procurement, and construction (EPC) or hybrid annuity mode (HAM), and the renewed interest shown by the private sector in road projects after the exit route was relaxed under the public private partnership model. Meanwhile, Ministry of Road Transport and Highways missed its target of awarding 25,000 km and was able to achieve only about 8,000 km. John Havlicek Womens Jersey
Mayday signals from 3 South-based airlines
Three regional airlines, all based out of South India, are struggling to raise funds, and at least one of them is expected to be sold as early as this week. The Coimbatore-based Air Carnival is set to be sold for about ?70 crore to an investor, sources close to the airline said. The airline has one ATR-72 and commenced its operations in July last year. At its peak, it used to operate 10 daily flights to three cities, including Chennai. A second airline, Air Pegasus, based out of Bengaluru, which shut its operations in July last year, sold a 74 per cent stake to FlyEasy, another Bengaluru-based airline, but has received only about ?5 crore out of the ?18 crore it is expected to get. Sources in the airline told BusinessLine that funds are being released in instalments, and that Air Pegasus will commence its operations next month. Air Pegasus had struck a deal with a Gulf-based company, which operates FlyEasy airline, in January, but FlyEasy is yet to commence its operations. Sources said the airline has started the process of leasing two 72-seater ATRs from the US-based Amur Aviation; one of them is likely to be inducted into the fleet this month. FlyEasy’s promoters are also planning to route the investment to Air Pegasus from another company. FlyEasy hasn’t received the NoC from various agencies, and hence, routing the investments through the airline may not be easy, sources said. The third cash-strapped airline, Air Costa, stopped its operations in February this year, and is in talks with several investors to raise about ?200 crore. A spokesperson for the airline said the Air Operator’s Permit is still valid, but setting a timeline for restarting operations was difficult. Embraer aircraft “We expect some positive response from some of the investors we are talking to this month,” said Kavi Chaurasia, Vice-President, Marketing. He said the airline’s entire fleet of Embraer aircraft had been taken back by the lessors. Air Costa did not bid for the regional connectivity scheme as it requires smaller aircraft than Embraers, he added. Chaurasia denied that the choice of Embraer aircraft for the fleet was one of the reasons for the airline’s temporary shutdown. He pointed out that operational costs had gone up, while revenues were stagnant. “If we had been able to induct six aircraft by December 2016, the airline would have turned profitable by now,” he said. “Embraer was, perhaps, the best choice at that time as we wanted to expand rapidly to several cities,” he added. Sources said the airline would consider inducting aircraft other than Embraer if any investor chooses to do so. Dalvin Cook Womens Jersey
India rises two spots to become the 4th largest aviation market
India’s record breaking aviation growth continues unabated. The International Air Transport Association (IATA) on Monday said the country saw the fourth highest number of passengers taking off in 2016, up two places from the previous year overtaking UK and Brazil. India had 13.1 crore passengers taking off — including domestic, international and connecting — last year. Globally, IATA says, 380 crore passengers took off last year (half domestic, 35 per cent international and 15 per cent connecting), up from 350 crore in 2015. The top three markets – US, China and Japan remained unchanged but there was a shakeup below with India a part of this upheaval. “The big movers on this year’s rankings are the key emerging markets of India and Indonesia. India has jumped up two places to the fourth ranking with 13.1 crore departures in 2016 and, with growth of 20 per cent year-on-year, continues to close in fast on Japan. Just three years ago India held the eighth ranking,” said IATA. Indonesia also moved up two positions in 2016, to the sixth spot. At this rate, India will so on be at the third spot in terms of number of passengers taking-off by overtaking Japan. In total passenger terms, India saw 15.2 crore passengers flying in 2016, with 9.9 crore flying within the country and 5.3 internationally . IATA’s take-off numbers are at 13.1 crore as it include 9.9 crore domestic flyers, 2.7 crore people flying out of India and only a part of the 2.6 crore international flyers coming to India, who took off to take more flights last year. However, the growth is coming amid an infra crunch — especially at busy metro airports — that is getting worse by the day due to the over 20 per cent rise in traffic that India has been witnessing on a month-on-month basis for almost two years now. Air traffic congestion has made hovering common at Delhi and Mumbai. These two airports hardly have any free slots available for new flights, with Mumbai completely choked. The Centre for Asia Pacific Aviation (CAPA) had recently said India had become the third largest domestic air travel market globally with more people flying here within the country last year than Japan, pushing the “land of the rising sun” to number four spot. India’s 9.9 crore domestic flyers in 2016 were more than the 9.7 crore in Japan. John Greco Jersey
India’s solar power capacity crosses 12 GW
India added 5,525 MW solar power generation capacity last fiscal, taking the total from this clean source to 12,288 MW. The country has abundant solar power potential which has been estimated to be 748 GW, New & Renewable Energy Minister Piyush Goyal stated in a written reply to Rajya Sabha today. It had achieved total cumulative solar power generation capacity of 6,763 MW in 2015-16. The capacity was 1,686 MW in 2012-13 which increased to 2,632 MW in 2013-14 and to 3,744 MW in 2014-15. In a separate reply, Goyal said the government has envisaged 4,800 MW from rooftop solar and 7,200 MW from large scale solar power projects in the country. India has plans to add 5,000 MW of rooftop solar and 10,000 MW from large scale solar power projects in the current fiscal, he said. Among states, Andhra Pradesh tops the chart with largest cumulative solar generation capacity of 1,867 MW as on March 31, 2017 followed by Rajasthan and Tamil Nadu at 1,812 MW and 1,691 MW respectively. Goyal said that in its submission to the United Nations Frame Work Convention on Climate Change on Intended Nationally Determined Contribution (INDC), the government has said that India will achieve 40 per cent cumulative Electric power capacity from non-fossil fuel based energy resources by 2030. It will be done with the help of transfer of technology and low cost International Finance which includes Green Climate Fund, he said. Thomas Morstead Authentic Jersey
China, India lead Asia-Pacific energy M&A deals in 2016
The Asia-Pacific witnessed a record year in terms of mergers and acquisitions in the energy space, with 198 transactions valued at USD 77.6 billion in 2016 and the second-largest year-end total going to India. However, the Asia-Pacific energy M&A logged a 33 per cent drop in value terms year-on-year while the number of deals (196) were similar to 2015, the report titled Volatility and opportunity: Energy M&A in Asia-Pacific by law firm Eversheds in collaboration with deal tracking firm Mergermarket. Market-wise, China maintained its top spot in 2016, accounting for 36 per cent of deals and 31 per cent of value. India had the second-largest year-end totals, accounting for 18 per cent of deals and 22 per cent of value, followed by Australia with corresponding figures of 11 per cent and 20 per cent, the report added. The Indian government has established clean energy targets such as 175 gw of renewable energy, or 15 per cent of total capacity, by 2022, of which 100 gw is expected to come from solar power. “This has also helped provide a focus for a strong flow of renewable deals, continuing a trend that started in 2015 when the largest power sector deals were largely renewable deals,” the report said. Meanwhile, renewable energy transactions accounted for over half of Asia-Pacific energy M&A deals in 2016. Regarding the current geo-political and economic trends shaping Asia-Pacific’s traditional and alternative energy markets, Eversheds Partner (corporate) Charles Butcher said “small producers lacking financial resources have been hardest hit by the oil crisis”. Butcher further said smaller cap deals are likely to continue in the short term as smaller players engage in distressed sales, merge to survive, or deleverage through asset divestment. “We expect that a number of energy majors will continue to exploit current assets while maintaining their balancesheets,” Butcher added. Jarred Tinordi Womens Jersey
Petronas pitches $1 bln offshore gas project stake to oil firms-sources
Malaysia’s Petronas has pitched an estimated $1 billion stake in a prized upstream local gas project to potential bidders including Royal Dutch Shell , ExxonMobil Corp, Thailand’s PTT Exploration and Production and Japanese firms, sources familiar with the matter said. If successful, the deal could mark Petronas’ biggest upstream stake sale since oil prices started declining more than two years ago. Petronas is targeting lowering operating expenses, job cuts and project rollbacks to help it navigate through the low oil price environment. The state-owned oil and gas company has approached about a dozen prospective buyers including global oil majors and Asian firms focused on Southeast Asia, said the sources, who declined to be identified as the talks are private. They said Petronas has begun providing financial and operational data to the companies and expects to receive bids over the next few weeks. Citing sources, Reuters reported in February that Petronas was considering selling a stake of as much as 49 percent in the SK316 offshore gas block in Malaysia’s Sarawak state. In a statement to Reuters, Petronas said that through its subsidiary, Petronas Carigali Sdn Bhd, it is looking for partners who can bring the technology and capabilities to explore, develop and efficiently operate the various fields and opportunities in the SK316 offshore gas block. “We are confident that we will attract the right partners to maximise the potential value of these opportunities to help meet the world’s growing oil and gas demand,” Petronas said. It was not immediately known what the individual companies’ response to Petronas’ approach was. ExxonMobil declined to comment, while Shell referred the query to Petronas. A spokeswoman for PTTEP declined to comment on the deal but said the company was keen to invest in Southeast Asia because it had expertise in the region where costs and risks were low. Tre Madden Authentic Jersey
GAIL India to hire ships on short term to ferry LNG from US
State gas utility GAIL India Ltd will hire ships on short term to ferry gas from the US after it was forced to scrap a USD 7 billion tender for making vessels in India, Oil Minister Dharmendra Pradhan has said. After dragging for more than two years, GAIL had in October last year scrapped a tender for hiring newly built ships to ferry liquefied natural gas (LNG) from the US after bidders did not agree to ‘Make-in-India’ terms. The company wanted shipbuilders to manufacture one out of three ships in India. “The tender was cancelled by GAIL as the bids received contained multiple deviations and were not in line with the tender condition,” Pradhan said in a written reply to a question in Lok Sabha. The bidders, he said, did not relent on “major deviations” they sought for the ships to be built at Indian shipyard. Because of this, “the bids were considered non-responsive as per GAIL’s tendering procedure and the tender for charter hiring of LNG ships to import LNG from the US was cancelled on October 15, 2016,” he said. Two Japanese bidders a consortium of Mitsui OSK Lines (MOL)-Nippon Yusen Kabushiki Kaisha (NYK Line) and Mitsui and Co. and a consortium comprising Mitsubishi Corporation- Kawasaki Kisen Kaisha Ltd (K Line) and GasLog, had sought several deviations from the tender conditions, which were not agreeable to GAIL. In the tender, GAIL sought to time-charter nine newly built LNG ships of a cargo capacity of 150,000-180,000 cubic meters to LNG it has tied up from Sabine Pass and Cove Point LNG projects in the US, with supplies slated to start from January 2018. Bids were sought in lots of three, with the condition that one of the three ship will be built at an Indian shipyard. Pradhan said GAIL has initiated action to charter hire ships on short term basis for a period of 3-4 years to ferry LNG from the US. “GAIL has informed that supply of US LNG is expected to commence from January 2018,” he said, adding a committee headed by NITI Aayog vice chairman has been constituted to look into the issues of desirability of acquiring shipbuilding technology/capacity for LNG ships. Report of the committee is awaited, he said. Bruce Bochy Authentic Jersey
Uday has improved payment situation: Tata Power MD Anil Sardana
Tata Power managing director Anil Sardana says Uday, the scheme for revival of state-run distribution companies, has helped discoms and improved payments but the biggest challenge for the sector continues to be the offtake of power. Discoms are still reluctant to buy power, he tells ET. Edited excerpts: Uday scheme has completed more than a year. What is your assessment of its impact? For people like us, what matters is that the state discoms should be in a better position to pay off dues, buy more power and invest on network. As of now, payment issues are getting resolved. But there is no visibility of power offtake improving yet. Moving the losses of the discom to the government’s balance sheet has helped them get more loans from the bank but, ultimately, they need to ensure they stop making losses and the bucket stops leaking. The last report shows some states have improved, but many states may not have improved and that means the bucket will keep leaking. Is there any movement on states buying more power and signing new power purchase agreements? The central government cannot penetrate that part. The discoms backed by regulators have to decide how much is the demand and how much of it has to be sourced in the short-term market, medium term or long term. If short-term rates are so low, regulators may ask to source from there. We hear discoms are reluctant to sign long-term PPAs (power purchase agreements) but there is no way to validate that as government data does not show much shortfall between peak requirement to the peak supply. One continues to hear though from people that in this city or that there are shortfall and hinterland continues to face power cut. But there is no data to validate load-shedding is happening. People assume that power cuts for two hours or four hours is a way of life. Diesel generator set consumption is still high. Tata Power had ambitious targets to begin with but, like its peers, the problems in the power sector impacted capacity growth. Has acquisition of Welspun’s renewable assets made up for the loss of momentum initially? The scale which we had initially targeted, we made up for that. And, if the order for Mundra ultra mega power project, which should come within a month’s time from the Supreme Court, is favourable, then each one of our asset would be performing well at an operational level. We have turned around Maithon and our solar projects. We have no asset in our stable which isn’t stable. Will the order on compensatory tariff for Mundra UMPP change your strategy of going slow on thermal projects? Our stakeholders are not asking us to go slow due to Mundra. We have decided on our own to conserve and maintain our debtequity ratio. As a management decision, we don’t want to unleash capacity addition without it being contracted or without that being backed with fuel supply agreement for long term. Would you add renewable energy capacity? That will also be determined on power offtake. On the surface, there is no problem of offtake or payment but, when you do the due diligence on the procurers, then you find that both could be challenging. For solar power, we have internally done rating profile of states and will pursue opportunities only in those states which have good rating.
Half of Mumbai’s electricity can be generated by solar power: Report
Mumbai and its suburbs have potential to harness solar power to generate as much as half the electricity consumed through rooftop solar photovoltaic installations, a report based on a first of its kind of study in the country has suggested. Mumbai’s need of electricity is typically around 3 GW and out of this roof-top solar installations can make around 1.72 GW of energy, the joint study- ‘Estimating the Rooftop Solar Potential of Greater Mumbai’ -carried out by five organisations National Centre for Photovoltaic Research and Education (NCPRE), Centre for Urban Science and Engineering (C-USE) at IIT Bombay, Institute of Electrical and Electronics Engineers (IEEE), Bombay Chapter, the Observer Research Foundation (ORF) and Bridge to India has shown. “The National Solar Mission of the Government of India envisages an ambitious target of 100 GW of solar energy to be installed in the country by 2022. Of this 100 GW, it is planned that 40 GW would come up on rooftops across the country. The report published on Monday is a step in realising this target,” said secretary of the Ministry of New and Renewable Energy (MNRE) Rajeev Kapoor, as he released the report. “Problem of rooftop power generation in India is not that of technology. It is about inertia of the companies operating in the field. Hence, this report would help not only the government, but the private sector as well and has a potential to be used as a ‘ready reckoner’ for solar capacity,” he added. While measuring solar power potential of Mumbai, a newer, easier method to measure the potential too was evolved, which can be used to measure solar power potential of other cities. The team employed a variety of inputs and techniques, include GIS mapping of all structures in Mumbai, ward-by-ward division, existing land use (ELU) maps of BMC and 3D mapping to discount areas covered by shadowing. The computer-based analysis was supported and verified by site visits to some locations and discounting of ‘weak’ structures which would not support solar panels. The study also revealed that Mumbai makes an ideal city for rooftop power generation as the city’s power demand peaks during the afternoon when the solar power potential is maximum. Clay Buchholz Authentic Jersey
How Narendra Modi government got it right on wind power; prices set to tumble
Solar power tariffs came down to roughly a third in the last five years thanks to price discovery through the competitive bidding route. Wind power prices, after remaining rather stable through these years, appears to be on the solar sector’s heels now. Buoyed by the Centre’s award of 1,000 mega watt (MW) wind projects through competitive bidding that reduced tariff by 19% from the bottom of the current feed-in-tariffs range, the Rajasthan government is set to invite bids for 500 MW wind power capacity in the next couple of months, a person close to the development told FE. The capacity could be used for sales to other states as well. The trend is likely to be followed by other states as well in the future. Industry watchers expects that states like Maharashtra, Gujarat and Madhya Pradesh might be the first lot to follow suit. Currently, wind power tariffs are determined by State Regulatory Commissions through the feed-in tariff method, where the state regulatory commission, in consultation with the other stakeholders, arrives at a tariff for one year. The Modi government is now looking at competitive bidding route to discover the market rates for wind power projects across various states. The prevailing feed-in tariffs are in the range of R4.25-4.8/unit across various states in India; in the recently concluded competitive bidding conducted by the Centre in Tamil Nadu, tariffs dropped to R3.46/unit. In comparison, 25-year levelised tariffs for solar projects came down from Rs 12.2/unit in 2010 to Rs 3.3/unit (Rs 2.97 for the first year) in the case of Rewa solar park in Madhya Pradesh in February, 2017. A senior Rajasthan Renewable Energy Corporation official told FE: “We have decided that we will invite tenders for the wind projects as against the feed-in tariffs mechanism.” “Besides, there are some 100 MW of wind power projects that are in various stages of commissioning in Rajasthan. We want to put these projects also under bidding route,” the official added. Companies had erected turbines in advance expecting feed-in tariffs. The state’s decision to adopt the bidding route could hurt the turbine manufacturers. As a step to prepare themselves before awarding the inter-state or intra-state projects, states along with Power Grid Corporation of India are setting-up infrastructure to evacuate the wind and solar power generated within the states. “The country has the technical know-how, manufacturing base, generators, all we need is a strong policy towards acquisition of land for wind projects, and safer and faster evacuation of wind power across states, so that total generation from wind sector does not fall below the 5,525 MW achieved in FY17,” the official quoted above said. Domata Peko Womens Jersey