Owing to various challenges, JSW Energy has decided to put its expansion plans on hold and focus on strengthening the balance sheet. "During FY13, due to pending clarity on policy and regulatory issues, we decided to consolidate our operations and have put most of our expansion projects, with the exception of the Kutehr hydro project, on hold," JSW Energy Chairman Sajjan Jindal told shareholders at the 19th AGM of the company.

 

The power sector is buffeted by headwinds, emanating from adverse economic conditions and sector-specific challenges, he said. Various issues such as the poor financial health of state distribution companies, fuel shortages, power purchase agreements and project clearance impacted the sector's profitability and consequently, investor sentiment, he said.

 

"Our focus remains on strengthening the balance sheet and keeping ourselves ready for growth opportunities. As the regulatory scenario eases and an opportunity to participate in competitive bids opens up, we plan to grow organically, while reducing our exposure to merchant capacities.

 

"We believe as the sector matures and consolidates, there will be inorganic growth opportunities for evaluation with a strategic fit to your company," he said. The company's operational capacity increased to 3,140 mw in the March quarter after it started generation at four units of its lignite-based plants at Barmer, Rajasthan.

 

"Leveraging operational efficiencies, technological expertise and a highly engaged and motivated workforce, the company targets a combined installed capacity of 11,770 mw."

 

Stating that FY13 marked the end of the company's current phase of capex cycle, Jindal said, "as the newly commissioned units ramp up operations, they will start

contributing additional volumes and boost cash flows". The 240-mw hydroelectric project at Kutehr, Himachal Pradesh has received the Environment Ministry approvals and land acquisition is under progress, he said.

 

Jindal further said the joint venture with Toshiba is progressing well and Toshiba JSW has commenced production to supply supercritical turbine generators to NTPC. "Additionally, Toshiba JSW is expanding its capacity from 3,000 mw to 6,000 mw," he added.