RPower synchronizes 300MW unit, aims at 1840MW capacity

Q: Gas availability has been an issue and that is something that has been worrying investors for quite some time. While D6 has been continuously falling and we have heard of plans that Reliance Power perhaps is looking to build an LNG terminal, do you think at current LNG prices, it is feasible, what is the cost of production if you take the imported gas at the current prices?

A: Gas itself is a big subject to speak about. Yes, we did announce it and we are working towards creating a facility. As I said, gas supply and gas pulling in various aspects are at different stages of discussion now and is at various levels of the government.

I can only say at this stage we are confident that some solution for the capacity which is ready to operate would come out shortly and these capacities would be put to use for the country as a whole.

Q: So you are expecting some decision on the gas pulling thing in the next few weeks or so?

A: I am always optimistic.

Q: If you can give us something concrete. Should we expect something by July or August, something pretty quickly?

A: I think in today's discussion, I would like to restrict to sharing the news of Butibori.

Q: Your listeners are investors in Reliance Power and they will always be happy if Samalkot is functioning quickly. If you can give us some idea that a solution is perhaps likely before the June-September quarter, it is out of equal interest, people don't look at Butibori only, they look at Reliance Power shares and they look at power as a sector. So if you can give us some indication of when that might start, it will be useful stock information?

A: I wouldn't like to put a deadline but I will be definitely optimistic and a solution would be found for the gas issue, not jut Samalkot but for the rest of the capacity in the country. These capacities would be put to use very quickly.

Q: What about the incentives or the measures that were announced yesterday by the RBI, whereby you can swap domestic rupee loan with forex loans at the current dollar-rupee level of 57 plus and dollar interest rates. Is that an attractive preposition? Are you contemplating anything like that?

A: We have always been optimistic in the financing angle. For example, in Sasan we already did that. First we financially closed the domestic financial institutions, then went ahead and traded the external commercial borrowings (ECB) for refinancing these projects.

Within a constant basis we keep seeing and its not just you did the financial closure once and you keep quite at the stage. We keep looking at opportunities to reduce the cost of funding in the right direction, from time to time.

Q: Not just on a project basis or the company basis, as a veteran do you think ECB is an attractive preposition at this point, given the kind of mood we have in financial markets? Do you think the cost of raising the money is lucrative enough for people to go out and raise funds at this point?

A: No it depends on the source of funding for this. We just did the PV plant, at 40 MW it is the country's largest PV plant. We went ahead and did the financing, just US agreement ADB (Asian Development Bank), just two of them and the cost of funding is substantially attractive compared to any other source of funding on this.

So it also depends upon what project you are doing and what are the sources of ECB. It makes a substantial difference. I don't think you can really put a generalized saying about ECB versus domestic finance.

Q: Another news that had come in, which might be some source of irritant for you, land acquisition in Jharkhand was an issue. Can you update us on whether that has been resolved?

A: Absolutely not. In fact that's a simple false alarm on that particular day by a local reporter. The local villagers wanted to meet the revenue officials there. The concerned officer had reached about 5 hours late. So they were irritated about the late meeting. It had nothing to do with respect to the land acquisition.