Panasian Power Ltd (PAP) is to raise Rs.600 million through its Initial Public Offering of 200 million shares at Rs.3.00 per share aimed at acquiring Manelwala Hydropower Ltd (MHPL) and settling debts. The share issue will open on December 7.
The company expects to identify more locations while increasing the hydropower capacity to 15 MW within the next five years, Chairman and CEO of the company, Dr. Prathap Ramanujam said. With the acquisition of MHPL, PAP plans to increase the capacity to 3 MW from 2.4 MW with an investment of Rs 100 million. He revealed that the small Power Project Agreement (SPPA) is to be signed with the Ceylon Electricity Board (CEB) within the next three months.
PAP, is a fully owned subsidiary of Power Hub International, Malaysia which is a subsidiary of Malaysia's Majulia Group. Under the Malaysian Government's Small Renewable Energy Programme, the company was the first to undertake the development of a mini-hydro plant in Malaysia. This same expertise is being used by Panasian Power to develop the use of renewable energy in Sri Lanka, Dr. Ramanujam said. The company has increased its earnings from the selling of power to the Ceylon Electricity Board, from Rs. 34 million In the year to March 2010 the firm earned Rs 70.9 million in revenue and Rs 20.1 million in profits, with interest costs falling to Rs 10.2 million from Rs 34 million earlier. The Government is planning to increase the mini hydropower capacity to 350 MW by 2015 and has invested Rs. 40 billion in installing mini hydropower plants in the country.
Panasian Power Ltd plans to operate as a commercially-viable sustainable company providing green energy solutions. "The provision of clean, renewable energy underpins the way we operate and do business, and is indicative of our efforts to preserve the environment by reducing carbon emissions," said Dr. Ramunujam. Mini hydropower plants are one of the most environmentally friendly energy sources in Sri Lanka.
Company director Deepal Sooriyaarachchi said the private sector provides 16 % of hydropower while 84 % is thermal power. The contribution of hydropower is very small compared to thermal power, but there is plenty of scope for the private sector to be in the industry. Hydropower is one of the cheapest energies as it costs only Rs 14.25 per unit, he said. |
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