CESC hopes to leverage green tag to raise easier offshore finance

KOLKATA: With an eye on big-ticket offshore financing deals for future greenfield projects, CESC is keen to sport the image of an environment-friendly power utility. For starters, its 500mw Budge Budge generating station has become the world’s first coal-fired plant to be registered by the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) as an energy efficient operation.

A UNFCCC registration for energy efficiency measures initiated at Budge Budge will enable CESC to earn carbon emission reduction units (CERs) and sell them at prevailing rates which vary from E10-12 per carbon credit.

According to top RPG circles, it’s a lot easier these days for environment-friendly power companies to line up offshore funds, especially at a time when CESC has big plans to go national, beyond its Kolkata-licensed area.

“At a stage when CESC plans to be a national player and execute a string of greenfield projects outside Kolkata, it is critical to be perceived by overseas investors/lenders as an environment-friendly power utility. The UNFCCC registration addresses that issue.

Besides giving CESC the freedom to encash accumulated carbon credits, offshore investors/lenders strictly prefer power companies that have deployed energy-efficiency measures,” said BL Chandak, RPG group vice-president (corporate finance).

CESC has also applied to UNFCCC to register similar energy efficiency measures underway at its 245mw Titagarh thermal station. The 500 mw thermal station has just been rated the country’s top thermal plant in ’05-06 by the Central Electricity Authority (CEA) for achieving 99.6% PLF (plant load factor).