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Techno Electric to tap PE funds for Simran Wind expansion

According to reports, Techno Electric & Engineering is in talks to raise funds from private equity players to fuel future expansion plans in its subsidiary Simran Wind Project Pvt Ltd. Currently two deals are being discussed, according to Joy Saxena, executive director, strategy and planning.

Techno Electric is an engineering procurement and construction company, focused on the power sector. Apart from EPC projects, it is also increasingly expanding into the wind power generation sector. Its total wind capacity at present is 207.35mw, bulk of which is under Simran.

“We may go ahead with some private equity. There are a couple of proposals we are discussing,” Saxena who is also a director at Simran Wind, told moneycontrol.com in an interview.

The company may either look at equity injection that will feed expansion over the next 1-2 years or it may tie-up long-term funding, so that there is no need for further fund raising in Simran for at least 5-6 years once this deal is done, he said. However, he refused to divulge further details since the discussions were on going.

International Finance Corp had last year invested USD 5 million to acquire 3.38% stake in Simran Wind.

Techno plans to add 600mw of wind power capacity through Simran in the next 5-6 years and the aim is to make it a 1,250mw company by 2020.

The focus will be on expanding via new green-field projects, but Saxena said the company may also look at acquiring any old projects, if available cheap.

Tamil Nadu is a key wind energy market for Techno. However, it had some payment related issues earlier with the Tamil Nadu Electricity Board and so is also looking at other states like Maharashtra, Gujarat and Rajasthan for growth. It also has some wind energy assets in Karnataka. There was 9-10 months payment delay in Tamil Nadu, but the payments have now started coming, Saxena said.

Techno Electric & Engineering is in talks to raise funds from private equity players to fuel future expansion plans in its subsidiary Simran Wind Project Pvt Ltd. Currently two deals are being discussed, according to Joy Saxena, executive director, strategy and planning.

Techno Electric is an engineering procurement and construction company, focused on the power sector. Apart from EPC projects, it is also increasingly expanding into the wind power generation sector. Its total wind capacity at present is 207.35mw, bulk of which is under Simran.

“We may go ahead with some private equity. There are a couple of proposals we are discussing,” Saxena who is also a director at Simran Wind, told moneycontrol.com in an interview.

The company may either look at equity injection that will feed expansion over the next 1-2 years or it may tie-up long-term funding, so that there is no need for further fund raising in Simran for at least 5-6 years once this deal is done, he said. However, he refused to divulge further details since the discussions were on going.

International Finance Corp had last year invested USD 5 million to acquire 3.38% stake in Simran Wind.

Techno plans to add 600mw of wind power capacity through Simran in the next 5-6 years and the aim is to make it a 1,250mw company by 2020.

The focus will be on expanding via new green-field projects, but Saxena said the company may also look at acquiring any old projects, if available cheap.

Tamil Nadu is a key wind energy market for Techno. However, it had some payment related issues earlier with the Tamil Nadu Electricity Board and so is also looking at other states like Maharashtra, Gujarat and Rajasthan for growth. It also has some wind energy assets in Karnataka. There was 9-10 months payment delay in Tamil Nadu, but the payments have now started coming, Saxena said.

The government, earlier this year, rolled back the accelerated depreciation benefit given to wind energy companies. It had allowed companies to write-off investments faster. The generation based incentive (GBI) scheme also ended on March 31. The scheme was to end if total wind energy capacity registered under it reached 4,000mw or by March 31, 2012. However, there is only 2,000 mw capacity so far and so the industry has been demanding restoration of the GBI scheme.

Saxena said that the company was claiming GBI but not accelerated depreciation benefit. He says the understanding with the ministry of renewable energy is that the GBI scheme is likely to be restored till 4,000mw capacity is set-up. Details, however, are yet to be disclosed by the government, he said.

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