Power Trading Corporation of India, which is coming out with its initial public offering on March 1, has signed a power purchase agreement to buy 750 mw from the Australia-based Snowy Mountain Engineering Company, which is setting up a plant at West Seti in Nepal.
With the recent development, PTC has decided to focus on cross-border power trading and look at opportunities mainly in the power-surplus Nepal, Bhutan and Bangladesh.
Chairman and managing director, Tantra Narayan Thakur, who was here on Tuesday, said, "Besides, the PPA, we are also talking to the Nepal Electricity Authority which has surplus power and we hope to sort out the commercial issues shortly."
"The only obstacle in buying power from NEA, as it seems now, is lack of transmission line between Nepal and India. We may also develop a transmission line along with NEA for common interest as the transmission line will benefit both the organisations."
Thakur also said that, however, in case of the deal with SMEC, the Australian major will develop the power transmission line from West Seti till the Indo-Nepal border from where the line will be further developed by PTC.
"The project, which is expected to achieve financial closure in a year, should be commissioned and commercially operational in two-three years. The main condition of the PPA is that PTC will purchase the entire power and energy from the project. We are eyeing the potential of power trading specially in the northern states with power being purchased from Nepal. PTC also may also start trading for Gujarat," Thakur said.
The corporation has also signed a memorandum of understanding with SMEC on September 26, 2002, following which this PPA was signed recently.
Besides, buying power from Nepal, PTC is also optimistic of buying power from two hydel power projects in Bhutan as it has been authorised by the government to undertake cross-border power trading.
"We are authorised to buy 300 mw from Chukha hydel project and Kurichu hydel project in Bhutan, while we are also looking at other opportunities in buying power from Bhutan. From Chukha project, we will be getting 270 mw, while the Kurichu project will fetch us 60 mw," he said.
The corporation is also talking to Tala Hydro-Electric Power Authority in Bhutan to buy 1060 mw during the next fiscal. PTC is also looking at power trading opportunities in Bangladesh and neighbouring countries.
Last fiscal year, PTC traded 4178 MUs of power, whereas in the first half of the current fiscal year, it has traded 4818 MUs. The turnover of the corporation rose to Rs 900 crore (Rs 9 billion) at the end of the last fiscal year against a turnover of Rs 354 crore (Rs 3.54 billion) during 2001-02.
In the current fiscal till December 31, 2003, the company has surpassed revenue from the sale of electricity for whole of last year at Rs 1,742 crore (Rs 17.42 billion).
Profit after tax stood as on December 31, 2003 stands at Rs 24.40 crore (Rs 244 million) against Rs 9.84 crore (Rs 98.4 million) for the whole of 2002-03.