As a part of its diversification and business expansion strategy, Nettlinx has announced acquisition of a controlling 51 per cent stake in Sri Venkateswara Green Power Projects, a company involved in developing and implementing a viable and environmentally sustainable 12 MW power plant, a renewable energy project.
The proposed state-of-the-art power plant, converts GHMC waste into energy, is being developed in the GHMC south zone located about 50 kms from the Telangana State Secretariat. The project will be operational in about 18 Months time.
Commenting on the acquisition, Dr Manohar Loka Reddy, Chairman, Nettlinx Limited said, “The investment and acquisition is strategic in nature, considering the company’s decision to diversify into sunrise business segments. We are confident of successfully executing this prestigious project, not just help us diversify but also brings in synergies to both the entities.”
He also adds that the total power project cost is around 192 Crores and would be funded with an equity infusion of 57.60 Crores, out of which Nettlinx Limited will contribute Rs 29.38 Cr towards its share of 51 % through its internal accruals.
K Venkateswara Reddy, Managing Director of Sri Venkateswara Green Power Projects and his associates will infuse Rs 28.22 Crores towards their share of 49 % equity participation. The rest of the project funding will come from term loans & working capital borrowings.
The project is commercially viable as the power purchase agreement with Telangana power distribution company specifies a tariff of Rs 7.40 per unit and is on a must buy basis and also stipulates a minimum guarantee price, Govt had given assurance of 700 Tons waste per day delivery at the plant site. This is the first project at this tariff made possible by extraordinary efforts of K.T. Rama Rao, Minister of Municipal Administration and Urban Development (MAUD) and his team from GHMC to make Hyderabad the pollution free city in the country.
This project was given significance to avoid landfills which pollute land and subterranean water for hundreds of years to make Hyderabad the pollution free city in the country and also the fly ash which is generated from the process is used for Road Pavers.
The plant is expected to generate revenue of around Rs 55 Crores Per Annum from the start of commercial operations. The company expects to achieve a 33 % PBT in the first year of operations.