India’s Adani Power to acquire Amarkantak thermal unit

Indian private-sector utility Adani Power is acquiring thermal generation capacity and an under-construction expansion from domestic debt-ridden Lanco Amarkantak Power.

Adani Power will pay 41bn rupees ($489mn) to acquire a 100pc stake in the Amarkantak project. Amarkantak is a 600MW thermal power plant in central India's Chhattisgarh state, with 1.32GW being added with the second phase of the project, Adani Power said.

The acquisition has been approved by relevant authorities under a corporate insolvency resolution process. The acquisition is scheduled to be completed by 20 October this year.

Amarkantak has a 2.78mn t/yr term supply arrangement with SECL, a subsidiary of state-controlled producer Coal India. It recorded revenues of Rs13.08bn in the April 2023-March 2024 fiscal year.

Adani Power continues to boost capacity through acquisitions and organic growth when most of the country's private-sector utilities have stopped expanding coal-fired power generation to focus exclusively on renewables. It operates 15.25GW of domestic thermal generation capacity in Gujarat and Maharashtra states of west India, Madhya Pradesh and Chhattisgarh in central India, Rajasthan in north India, Karnataka in south India and Jharkhand in east India. The company aims to have installed generation capacity of more than 30GW by 2030. The Amarkantak acquisition raises its current operating capacity to 15.8GW.

Adani Power is also in the process of acquiring a 1.2GW thermal power project in south India's Tamil Nadu state. Plant operator Coastal Energen is also involved a corporate resolution insolvency process.

Adani Power consumed 19.44mn t of imported coal over 2023-24. This was also more than double the 7.66mn t in 2022-23. Its domestic coal burn in 2023-24 increased by 10pc from a year earlier to 31.72mn t.

The outlook for India's thermal power capacity growth is very favourable, the company told investors in July. Peak demand is forecast to grow from 250GW currently to 400GW by 2031-32. This will require an additional 80-90GW thermal power capacity to meet peak demand, even if the 500GW target of non-fossil fuel capacity is achieved, Adani Power said.

Indian state governments have already started to call for bids for term supplies to meet power demand 5-6 years from now. Bids for supplies of 6.4GW from thermal power generation have already been invited by three states, while more bids are expected from other states soon, Adani Power said, adding that it is taking proactive steps for expansion because of this positive outlook.

By Ajay Modi