Indian utility Essar Power may have to sell two of its gas-fired power plants in order to clear debt.

The company is, according to Gas to Power Journal, playing down comments from its Chief Information Officer that two plants in Gujarat are being considered for sale.
Essar Power
 “We have no plans now to monetize any assets for now,” a spokesman said, contradicting the earlier statement. Instead the company maintains it is stepping up efforts to get its plants back into operation and profitable

The company has two captive gas-based plants in Hariza in Gujarat with a capacity of 500 MW and 515 MW each, which are currently shut for want of fuel.

The company has a $302m (Rs 20,369 crore) debt, which appeared to inform Essar Power’s Chief Financial Officer Alok Nagpal when he stated, “We are evaluating all options for monetising our assets. We are looking at selling two of our captive gas-based plants in Gujarat.”

“Both these plants are ready and can go operational once we have fuel supply. We looking at selling off these plants now. We are still evaluating its valuation and it may take some time. The benefit for the buyer, who would mainly be a captive user, will be that it can operate the plant immediately once the fuel is available,” Nagpal said.

The 500-MW Bhander plant in Hazira was commissioned in 2006 and commenced full commercial operations in October 2008 but due to high fuel price, the company shut the plant three years ago.

The 515-MW Essar Power Hazira had signed power purchase agreements (PPAs) with Essar Steel and Gujarat Urja Vikas Nigam and was commissioned in October 1997.

The company’s coal power stations may also enter the equation in order to address the debt issue.

“We are evaluating these options as well. If we get good valuations, we may sell some of our coal-based plants as well. But this will take another two-three years. Till then we will try to commission our stuck projects,” Nagpal said.