Moving ahead with its plans to acquire coal assets abroad, the power trading major, PTC India Limited has decided to invest a total of USD 69 million for acquiring five Indonesian coal mines, namely PT Kaltim Global, PT Elelktra Global, PT Pacific Global Utama, PT Kertawira and PT Dongin.

Out of the total, USD 53.08 million will be infused by PTC as equity for obtaining financial closure for the five projects, while a sum of USD 15.40 million has been earmarked as capital expenditure. In order to avoid direct risk to its own financials, PTC is likely to soon float an overseas subsidiary, or special purpose vehicle in Singapore, to make this investment.
This subsidiary will acquire the PT Kertawira Sera Lestari and PT Dongin outright, as per the terms and conditions of the term sheet, signed by PTC with the respective mine-owners. Further, the subsidiary will participate in the equity of the remaining three coal mines as a 50:50 joint venture partner.

The subsidiary firm will also explore further investment opportunities and undertake other imported coalrelated businesses, including trade of foreign coal. Pertinently, PTC plans to buy coal mines in mineral rich Indonesia mainly to supply fuel to domestic power projects, with which PTC has power purchase agreements, while the balance coal will be retained by the firm for sale to other coal-consuming entities.

The firm is already supplying imported coal to various utilities, apart from facilitating development of power generation in the country by mobilizing funds to the project developers in the form of equity in projects through its subsidiary, PTC India Financial Services. The utility has also joined a global consortium led by Morgan Stanley Infrastructure Partners, for funding Indian power projects of Asian Genco, and has already launched the Indian Energy Infrastructure Fund, in joint venture with the London based Ashmore Group Plc to support its power project funding endeavor.

(Sourced from Prospering Indian Power Sector)