Greenko Group plc (GKO) - Half Year Trading Update
RNS Number : 8477O
Greenko Group plc
17 October 2012
17 October 2012
Greenko Group plc
("Greenko" or "the Company")
Half Year Trading Update
Greenko, the Indian developer, owner and operator of clean energy projects,
announces its trading update for the six months ended 30 September 2012.
The Company had a successful first half and remains on track for management's
expectation of 30% full-year revenue growth, as well as the delivery of a
1,000 MW operating portfolio in 2015. The advantages of clean power in India
continued to improve over the period, as wind and hydro power achieved grid
parity with coal-fired generation, interest rates fell 0.5% and July's massive
blackouts simultaneously exposed the scale of the country's power deficit and
deprived one tenth of the world's population of electricity. Subsequent
government initiatives to strengthen and extend the transmission grid, improve
the credit quality of State Electricity Boards and renew the Generation Based
Incentive (GBI) have further reinforced the inherent value of Greenko's
Hydropower is running well and the monsoon's late start was largely offset by
its extension into October. The recently acquired 32 MW of run-of-river
projects in Himachal Pradesh are performing well and have exceeded
management's initial expectations. Biomass is operating in-line with
expectations and, although it remains below the long-term target plant load
factor (PLF), four of the six plants benefitted from modest increases in their
power tariffs. LVS, the Company's gas plant, is operating in-line with
Over the period merchant power prices were unexpectedly robust, and the
Company sold Renewable Energy Certificates (RECs) at approximately €25/MWh, as
well as approximately half of the 346,300 carbon credits (CERs) on-hand at the
year end. The remaining CER inventory should be sold this year. India's well
publicised grid failure in July had no material impact on the Company's
operating projects, as most of the problems occurred at the eastern end of the
Northern Grid, away from Greenko's generating assets.
Projects in construction
Greenko's focussed development strategy has over 500 MW of projects
in-construction. These remain on schedule and include three 100 MW utility
scale wind power projects, plus six hydro projects totalling almost 200 MW.
In addition to this, work should soon start on Greenko's fourth wind power
cluster in Rajasthan. The significant projects under construction are:
· Ratnagiri Wind Farm (100 MW - Maharashtra): the sub-station for the
grid connection was completed with 120 MW of capacity. Two-thirds of the
Phase-1 (65.6 MW) turbines are completing pre-commissioning trials and the
first power was exported during the monsoon. The remaining Phase-1 turbines
are expected to begin commissioning shortly. Phase-2 (35.2 MW) remains on
schedule, with construction expected to start at the end of 2012, bringing the
project to a capacity of 100.8 MW in late 2013. The project should deliver one
of the best PLFs in the State and it has an attractive 15-year power purchase
agreement (PPA) with a tariff of Rs5.69/kWh, plus the GBI once it is renewed.
· Basvanbagewadi Wind Farm (100 MW - Karnataka): site work is underway
and the sub-station for the grid connection is nearing completion. Phase-1
(51.2 MW) turbine components are due to start arriving on site this month and
the project should begin commissioning in the current financial year. Phase-2
(49.6 MW) remains on track to start site preparation at the end of 2012, with
commissioning in late 2013. The project should achieve an annualised 30+% PLF
using the GE XLE technology.
· Balavenkatpuram Wind Farm(100 MW - Andhra Pradesh): site access work is
underway and all key permits are in place, along with the construction
contracts. Phase-1 (51.2 MW) turbine components are expected to begin
arriving on site around the end of 2012, with commissioning targeted to start
in mid-2013. Phase-2 (49.6 MW) remains on track for the start of construction
in late 2013. The project will use the GE XLE technology.
· Dikchu Hydropower (96 MW - Sikkim): the project is progressing well and
is now one third complete. It remains on time and on budget, despite the
significant challenges caused by this year's flooding and landslides in
Sikkim. The underground power house excavation is completed, the head race
and pressure shaft tunnelling is on schedule, and project commissioning is
still planned for late 2014.
· Small Hydropower (92.6 MW - Karnataka and Himachal Pradesh): five small
projects are under construction and on schedule for commissioning in 2014.
Key permits and contracts are in place, site access work is underway,
tunnelling at Paudital Lassa (24 MW) has started and construction of AMR-2's
(10 MW) headrace and power house is scheduled to begin this month.
Projects in development
In addition to the projects already mentioned, Greenko has over 900 MW of
projects in its pipeline that are fully permitted and under active
development. The Company expects to start construction on approximately 400
MW of these projects during the next financial year.
The 49.5 MW Devgarh wind project in Rajasthan was promoted into the active
development portfolio and should be commissioned in 2013. Greenko has been
evaluating several projects in Rajasthan over the last four years and the
recent significant increase in power tariff to Rs5.44/kWh brought Devgarh's
development timeline forward. Anticipated annual generation is approximately
107 GWh and the project is expected to provide an attractive IRR for
shareholders. Greenko's other wind project in Rajasthan (Jaisalmer - 100 MW)
remains on track for construction to start in late-2013.
Greenko's generating portfolio strategy is designed around asset clusters that
offer local economies of scale, as well as diversification by geography,
off-take and technology. In this regard, while GE's wind turbines should
provide the majority of Greenko's new wind capacity over the next few years,
the Company considers it prudent to broaden and diversify its technology
base. As such, the Devgarh project is likely to use the Vensys-82 1.5 MW
gearless turbine, made by ReGen Powertech, which Greenko believes provides a
capable alternative for the Indian market, as well as giving the Company
diversification at an attractive price.
In hydro, Greenko continues a dual strategy of actively assessing potential
acquisitions and new concession tenders that meet its risk-adjusted return
threshold. As always, management remains highly selective and takes forward
only the most attractive opportunities that complement the existing portfolio.
Greenko strengthened its Board in August, with the appointment of Keith Henry,
whose extensive experience in the global power and energy sectors includes
running large private and publicly listed companies that successfully built
major assets in developed and emerging markets. During his career, Keith was
Chief Executive of National Power plc, a FTSE100 company, International Power,
Brown & Root Ltd, and Kvaerner Engineering & Construction Ltd. This
significant appointment reinforces the Company's commitment to the highest
standards of corporate governance, as well as enhancing its existing
capability as the roll-out of Greenko's utility scale clean energy projects
accelerates across India.
Greenko remains on track to more than double its current operational
generating capacity by the end of 2013, as the first phase of construction is
substantially completed at each of its four main wind clusters. These should
take the total operating wind capacity to over 250 MW by the end of 2013. The
associated equipment orders have been placed for all these projects, which
also have the necessary equity and debt funding in place. The Company
therefore remains comfortably on track for its 2015 operating target of 1,000
Anil Chalamalasetty, CEO and MD of Greenko, said: "We had a good first half
and are now looking forward to seeing turbines up and running at our first
three 100 MW wind farms. Progress in hydro has been particularly good and we
continue to see exciting opportunities to increase shareholder returns. The
Devgarh wind project is also a fine addition to our portfolio of projects in
active development. Having evaluated ReGen's turbines over the last two
years, Devgarh provides an appropriate opportunity for us to diversify our
technology suppliers and launch our fourth major wind cluster in India."
For further information please visit www.greenkogroup.com or call:
Greenko Group plc
+44 (0)20 7920 3150
Vasudeva Rao Kaipa
Arden Partners plc
Richard Day / Adrian Trimmings +44 (0)20
Matt Ridsdale / Mike Bartlett +44
(0)20 7920 3150
Greenko is a mainstream participant in the growing Indian energy industry and
a market leading owner and operator of clean energy projects in India. The
Group is building a de-risked portfolio of wind, hydropower, natural gas and
biomass assets within India and intends to increase the installed capacity it
operates by winning concessions to develop new greenfield assets as well as
making selective acquisitions which enhance shareholder value.
Greenko's portfolio is carefully planned and managed to ensure it offers
investors diversification geographically and spreads risks across a number of
projects which utilise varied environmental technologies. The Company's goal
is to reach 1 GW of operational capacity in 2015.
With a core belief in sustainability both operationally and environmentally,
Greenko endeavours to be a responsible business playing an important role in
the community beyond its role in the power generation industry. The Company
maintains a continuous involvement in localised projects and community
programmes which centre on education, health and wellbeing, environmental
stewardship and improving rural infrastructure.
Greenko Group plc was admitted to trading on the AIM market of the London
Stock Exchange (LSE: GKO) in November 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
TSTUNRRRUVARAUA -0- Oct/17/2012 06:00 GMT
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