Tata Power and SN Power announce exclusive partnership agreement to set up Joint Ventures to develop hydropower projects in India and Nepal

30.10.2009 08.00 | pressrelease

(Mumbai, 30th October) Tata Power, India’s largest integrated private power utility, and SN Power, Norway’s fast-growing international renewable energy company, signed an exclusive partnership agreement to develop joint hydropower projects in India and Nepal. This is the first time that Tata Power has entered into an exclusive partnership with another hydropower company.

The partners aim to have 2,000 MW under construction or in operation by 2015, and a total of 4,000 MW by 2020. Tata Power and SN Power have already begun pursuing potential project opportunities based on the vast reserves of renewable energy in the Himalayas.

The business model for the exclusive partnership is to develop hydropower projects that will meet the increasing energy demand in India and Nepal through the provision of clean energy. The partners will also establish a jointly-owned Services Company in India, which will provide each project with world class technical and managerial expertise.

In addition to partnering on new project developments, Tata Power and SN Power are also considering to co-develop the Tamakoshi 3 project in Nepal to which SN Power holds licence rights.

Speaking on the occasion, Mr. Banmali Agrawala, Tata Power’s Executive Director of Strategy and Business Development, said: “SN Power provides valuable hydropower experience from Norway as well as from key projects in emerging markets, including India and Nepal. We look forward to working together to jointly develop efficient, high-quality and sustainable projects that bring significant benefits to the region as well as local communities. SN Power’s philosophy and business principles are very much like Tata’s. This gives us a solid platform for cooperation from day one.”

Øistein Andresen, President and CEO of SN Power, comments: “We are very pleased about the agreement with Tata, which is a global industrial player with a very strong position in the energy business in India. The Partnership allows us to combine our extensive hydropower competence with their large-scale industrial experience all the while drawing on our common approach to social and environmental sustainability and ethical business conduct. Through this partnership, we will be able to explore business opportunities and attract the competence and financing necessary to take on new and needed development projects in this high-potential region.”

Each joint project will be developed through a Special Purpose Vehicle (SPV) structure. For SPVs in Nepal, SN Power will hold 50 percent of the total issued and paid up capital of the SPV + one equity share. For SPVs in India, Tata Power will hold 50 percent of the total issued and paid up capital of the SPV + one equity share. Both companies will have equal say in all matters across all SPVs.

Background information

Tata Power and SN Power entered into a Memorandum of Understanding in 2008. Together, the two companies have 100 years of hydropower experience each – Tata Power as a hydro-electric pioneer in India and SN Power through its majority owner Statkraft, Europe’s largest hydropower generator. The two companies share a common business philosophy, with significant focus on ethical business standards, sustainable project development and world-class health and safety standards.

Inspired by a powerful vision, the founders of Tata Power pioneered the generation of electricity in India with the commissioning of India’s first large hydro-electric project in 1915. The hydro stations are located in the Western Ghats of Maharashtra and have a combined capacity of 477 MW. The other green power generation plans that Tata Power has internationally are a 525 MW combined heat-and-power plant based on waste gases at Corus’ IJmuiden works in the Netherlands, the 114 MW Dagachhu Hydro Power Project in Bhutan, operating clean energy assets such as 200 MW of wind farms and 210 MW power projects based on coke oven and waste gases in Eastern India. Tata Power has also invested in clean energy technologies through its stakes in Geodynamics in Australia and for Enhanced Geothermal Systems and in Exergen in Australia for clean coal technology.

SN Power is a long-term industrial investor in the hydropower sector, with a business model based on active ownership, transfer of Norwegian hydropower expertise, and responsible, sustainable development of renewable energy. The company emphasizes close cooperation with all stakeholders, and maintains high social, environmental and ethical standards in all activities. SN Power draws its expertise from a long tradition of hydropower development in Norway, spearheaded by Norway State-Owned Utility, Statkraft, which holds 60 percent of SN Power with 15,000 MW installed capacity. SN Power’s core staff includes experienced Norwegian hydropower engineers as well as staff with broad international backgrounds in energy, infrastructure, manufacturing industries and corporate finance. Norway is the world's fifth-largest hydropower producer and the only industrialized nation meeting its domestic electricity demand almost exclusively through hydropower. Electricity from hydropower was the key factor in transforming Norway from one of the poorest countries of Europe about a century ago into the industrialized and wealthy nation it is today

About Tata Power:
Tata Power is India's largest private sector power utility with an installed generation capacity of over 2900 MW and a presence in all the segments of the power sector viz Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading. The Company has successful public-private partnerships in Generation, Transmission and Distribution - "North Delhi Power Limited" with Delhi Vidyut Board for distribution in North Delhi, 'Powerlinks Transmission Ltd.' with Power Grid Corporation of India Ltd. for evacuation of Power from Tala hydro plant in Bhutan to Delhi and 'Maithon Power Ltd.' with Damodar Valley Corporation for a 1050 MW Mega Power Project at Jharkhand. It has acquired 30% stake in Coal Companies at Indonesia and is developing the first 4000 MW Ultra Mega Power Project at Mundra (Gujarat) based on super-critical technology. With its track record of technology leadership, customer care and redefining contours of the Indian power sector, Tata Power is poised for a five-fold growth and committed to 'lighting up lives' for generations to come.

About SN Power:
SN Power is a growing international renewable energy company with hydropower projects and operations in Asia, Africa and Latin America. Headquartered in Oslo, Norway, SN Power draws on the industrial and financial experience and strengths of its joint Norwegian owners Statkraft, a European leader in renewable energy and Norfund (Norwegian Investment Fund for developing countries). SN Power’s objective is to develop, invest in and operate hydropower assets in selected markets including the Sub-Himalayan Region.
SN Power has a total generation capacity of about 950 MW in operation and under construction, and a project pipeline of 1800 MW. In India, the company is present through its investment in Malana Power Company, which owns the operating 86 MW Malana plant, the 192 MW Allain Duhangan hydropower project under construction and the 200 MW greenfield development Bara Bangahal. SN Power has established a liaison office in Noida, India, to support the company’s business in the country. In Nepal, SN Power is majority owner in Himal Power Limited (HPL) operating the 60 MW Khimti hydropower plant and is presently developing the 600 MW Tamakoshi 3 project. SN Power’s assets in Malana Power Company and HPL will not be included in the cooperation with Tata.