Big picture - Why invest in OPG Power Ventures Plc.
OPG Power Ventures Plc. Snapshot
OPG is looking to replicate India’s likely energy generation mix and to that end is undertaking the development of solar energy projects too with an initial focus on commissioning at least 300 MW in the next three years.
OPG has been listed on the AIM market of the London Stock Exchange since May 2008 and since listing in 2008, the Company has grown from 20 MW of generating capacity to 750 MW, consistently delivering strong results as well as growth.
In our view India provides exciting and dynamic opportunities in our sector given its low and rising per capita consumption of electricity as well as India’s overall economic growth estimates. With its track record of engineering, operations and financial management, OPG is well positioned to play a part in this growing sector.
The Group’s flagship 414 MW coal fired thermal plant is in the industrial state Tamil Nadu close to the ports of Ennore and Chennai.
The plant comprises four units on the same site. The first 77 MW unit commenced operations in 2010 followed by 77 MW Chennai II in 2011, 80 MW Chennai III in 2013 and 180 MW Chennai IV commencing in June 2015. The EPC for most units was done by our in-house EPC team and the operations are also managed by OPG’s own team.
All units have technology allowing them to use imported coal (typically Indonesian) or domestic (Indian) coal. Proximity to the ports provides additional flexibility in the procurement of imported or domestic coal. Further, the plant uses air cooling technology reducing water usage by over 90% and is OHSAS 18001:2007 certified for its occupational health and safety systems. All units have maintained compliance with environmental requirements.
Generation from this plant is sold principally to industrial and commercial customers at attractive tariffs. 74 MW (net) is contracted with Tamil Nadu state utility for 15 years until December 2029.
In addition, the Group has a 25.4 MW natural gas plant and a 10 MW heat plant in Tamil Nadu that are held as investments.
The Group’s 300 MW coal fired thermal plant in the industrial state of Gujarat is close to two major Indian ports: Mundra and Kandla.
The plant has two units of 150 MW each on the same site. The EPC for the plant was done by our in-house EPC team and the operations are also managed by OPG’s own team. The plant commenced operations in 2016.
Both units have technology allowing them to use imported coal (typically Indonesian) or domestic (Indian) coal. Proximity to the ports provides additional flexibility in the procurement of imported or domestic coal. Similar to our Chennai plant, the plant uses air cooling technology reducing water usage by over 90%. All units are compliant with India’s environmental requirements.
Generation from this plant is sold principally to industrial and commercial customers to both within and outside the state of Gujarat.
The Group’s objective is to mirror its energy mix with that of India and aims to set up 300 MW of renewable projects over the next three years.
Solar power has now become attractive due to the significant fall in panel costs and in India, which has high irradiation, it has become viable without subsidies. As a result, India has set a target of installing 100 GW of solar power by 2022 to meet its commitment towards climate change.
62 MW Solar Karnataka
The Company has secured its first 62 MW of solar projects, as part of its renewable strategy. The projects are across four sites comprising three sites of 20 MW and one site of 2 MW. Sales from these projects will be to the Karnataka state distribution companies on a 25 year long term Power Purchase Agreement at a tariff of Rs5 per kWh. The sites are close to existing transmission infrastructure.
The solar plants are expected to be operational in 2017.
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Mr. Arvind Gupta
Mr. Gupta gained experience in various divisions of the business including flour milling, steel production and logistics, becoming President of Kanishk Steel, listed on the Bombay Stock Exchange. Having identified the opportunities in power generation, Mr. Gupta developed this division within Kanishk Steel with initial projects in wind power generation in 1994. He was the pioneer of the Group Captive Power Producer concept in Tamil Nadu State and developed the 18MW gas fired plant of OPG Energy, a Group entity, through to successful operation in 2004. Since then, Mr. Gupta has been responsible for the construction and developments of the power plants of the OPG Group as well as its overall strategy, growth and direction.
Mr. V.Narayan Swami
Mr. V. Narayan Swami has over 30 years’ experience in finance and management. Mr. Swami started his career with the State Bank of India before moving to Ashok Leyland Limited in 1976. For ten years until 1992, he held a variety of positions within Standard Chartered Bank including as Senior Manager- Corporate Division for Southern India. Later Mr. Swami joined Essar Global, subsequently becoming CFO of Essar Telecom Group where he played a key role in the entry and planned exit of Swisscom from the venture along with the simultaneous investment by Hutchinson Whampoa. Mr. Swami was group CFO of Best & Crompton Engineering, listed on the Bombay Stock Exchange, before joining the Group in 2007 as Finance Director.
Mr. Martin Gato
Mr. Martin Gatto has considerable experience as a senior financial professional and has worked at a number of large UK quoted public companies . He is a graduate of Brunel University and is a Fellow of the Chartered Institute of Management Accountants. During his career, Mr. Gatto gained international experience at Hilton International Company where he was responsible for business development and property. Later, as Chief Financial Officer, of British Energy Plc, Midlands Electricity Plc and Somerfield Plc, he was responsible for the successful execution of turnaround strategies. Until recently, Mr. Gatto was Non-Executive Chairman of Neutrahealth Plc, an AIM listed company. He is also the Chairman of Medico – Dental Holdings Limited.
Mr. Michael Grasby
Mr. Grasby is a Chartered Engineer and has been associated with the UK and international power industry for many years. He was manager of the Drax Power Station between 1991 and 1995 and director of operations for National Power, with responsibilities for over 16,000 MW of generating capacity, until 1998. Following the demerger of National Power in 1999, he joined International Power as senior vice-president for global operations and retired in 2002. Mr. Grasby has experience of power company directorships in the Czech Republic, Portugal, Turkey and Pakistan. Mr. Grasby was also formerly a Non-Executive Director of Drax Plc where he chaired the Health and Safety Committee and sat on the Audit, Remuneration and Nominations Committees. He retired from the Drax Board in April 2011.
Mr. Ravi Gupta
Mr. Ravi Gupta is the brother of Mr. Arvind Gupta and throughout his career has been involved with family businesses. He is one of the founders of Kanishk Steel and its Chairman. Mr. Gupta has also been associated with the flour mill industry, setting up a new flour mill in 1988 in Tamil Nadu State, Salem Food Products Limited, where he is Managing Director.
Jeremy has been appointed to the OPG Board in November 2016 as a non-executive director. He is a Fellow of the Institution of Civil Engineers with 40 years of international experience in project and programme management over very large multi-site, multiple project operations portfolios for and within government, public companies and private companies. He is also currently an independent non-executive director of SSE plc, John Laing and an independent non-executive director of WYG plc, an Advisory Board member of PricewaterhouseCoopers LLP and Chairman of Merseylink Ltd. Additionally, Jeremy sits on the governing Court of Strathclyde University. He was Director General of the London 2012 Olympic and Paralympic Games from 2007 until the Olympic Baton was passed on to Rio de Janeiro in 2012. For eight years prior to this, he was a Principal Vice President with Bechtel, responsible for their worldwide civil operations and has lived and worked extensively in the Middle East and Asia Pacific. He was awarded CB in the 2013 New Year Honours and holds an honorary Doctorate of Engineering from Napier University.
The total number of issued ordinary shares of OPG Power Ventures Plc as at 30th September 2016 is 351,504,795. The number of shares "not in public hands" as at 30th September 2016 is 50.92%
Major shareholders are those with shareholdings of 3% or more. As at 30th September 2016 these were disclosed to be:
Directors & Related 50.9%
M & G Investment Management Ltd 11.3%
Audley Capital Management Ltd 5.6%
British Steel pension Scheme 3.6%
Hargreave Hale Ltd 3.4%
OPG Power Ventures Plc is domiciled and incorporated in the Isle of Man. Accordingly the rights of shareholders of OPG may be different from the rights of shareholders in a UK-incorporated company.
IOMA House, Hope Street
Douglas, Isle of Man
Phone: +44 (0) 1624 681200
Fax: +44 (0) 1624 681390
No. 6, Sardar Patel Road
Chennai - 600 032
Phone: +91 44 42911234
Fax: +91 44 42911209
+91 44 42911212
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