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Velcan Energy France sells Satya Maharshi Power Corporation Limited -7.5MW biomass power plant in India

Velcan Energy is a France based Independent Clean Power Producer which specialises in renewable electricity generation in emerging markets from hydroelectric power and biomass combustion.

Velcan Energy’s headquarters are located in Paris and the company is quoted on NYSE Euronext (MLVEL). Reference shareholder of Velcan Energy is Financière Saint Merri SA, which reference shareholder is Crédit Agricole. The Company’s focus of operations are in India and Brazil.

The company entered India in middle of 2006 with the Velcan Energy became the first French electric utility in India, with 100% ownership of an Indian power plant with acquisition of Satya Maharshi Power Corporation Limited a 7.5 MW biomass power plant in the Indian state of Andhra Pradesh. The company also had a second biomass power plant of 7.5 MW called Rithwik Power plant.

The company in the third quarter of 2oo8, decided to strategically focus on hydropower and had since returned its 4 allotments in biomass -Dheeru (7.5 MW), Mangalam (7.5 MW), Shimoga (10 MW) and KR Nagar (10 MW)-in the States of Maharashtra and Karnataka.

The company has since sold the 7.5MW  Rithwik biomass project at the end of the first quarter this year to a strategic buyer. According to a release today, the company has announced the sale of its first biomass project in India the 7.5MW- Satya Maharshi Power Corporation Limited to exit the biomass business in India.

Antoine Decitre, Co Managing Director of the group says “Velcan Energy is now a pure hydropower concession player, dedicated to emerging markets. Given all the projects and the prospection underway in our new markets, it is good that the company focuses on a single line of business. Our Indian biomass plants have helped us understand the Indian power market and establish our presence in the country. They were fundamental to obtain our Indian hydropower concessions. It is thanks to them that we now have our 500 MW Yarjep River concession. As of today we are still the only foreign company with such a deal in India.”

It is interesting that the company has taken this approach, given the demand for biomass projects in India. The company must have sold off both the projects at attractive valuations as both were generating projects with good PPA’s and also CDM certified projects though the actual financials of the transactions have not yet been disclosed.

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