Korea Western Power invests in Pioneer Gas Power's $250 million project

Korean Western Power Co. Ltd (KOWEPO), subsidiary of South Korea's $ 38.7 billion power giant KEPCO, has picked up 22.7% stake for an undisclosed amount in Pioneer Gas Power Ltd that is setting up a 388 MW gas based power plant in Raigad, Maharashtra. KOWEPO has plans to take its stake up to 40%. The project is expected to cost $ 250 million and will be operational by end of 2013.

Lodha Capital Markets acted as the sole advisor to Pioneer Gas Power Ltd. for this transaction.

KEPCO is the largest electric utility in South Korea with revenues of $ 38.7 billion and is responsible for almost 90% of South Korea's electricity generation. Its subsidiary KOWEPO is engaged in the business of producing electricity and operates thermal power stations and combined cycle power plants. KEPCO operates about 80,000 MW of power plants in Korea. Pioneer Gas Power Ltd is part of the Hyderabad based Pioneer Group promoted by Mr. K Sudhir Rao and Mr. K Suhan Rao.

"We were keen to enter in India given that the country is facing a large energy deficit and the energy requirement is expected to grow at 8-10% p.a. over the next 5 years. We were impressed with the progress on PGPL's upcoming 388 MW power project. Financial closure is done with Consortium of 9 banks with IFCI being the lead Institution. EPC Contract is awarded to Tata Projects Ltd. PGPL's capex cost being one of the lowest during current times for a gas fired power plant is a new benchmark in itself" said Mr. Bong Geun Kim, Director, KOWEPO.

"We are very excited to partner with KOWEPO and will stand to gain significantly from their knowledge and expertise." said Mr. K. Suhan Rao, Managing Director of Pioneer Gas Power Ltd."

Source : Equity Bulls

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