LVL Energy says overseas investments will minimize local risks
„Announces plans to enter East African hydro power market „Will actively seek investments in local solar energy space
LVL Energy Fund Limited (LVEL), a leading energy company in the country said, their overseas investments are aimed at minimizing the risks that could stem from a volatile local energy market, characterized by ad-hoc policy changes and lack of transparency in pricing.
“We are not limiting ourselves to Sri Lanka. Energy mix is changing in Sri Lanka. So we will go overseas because we must realize that whatever you do in Sri Lanka, our paymaster will be the Ceylon Electricity Board, which is a risk. So in order to diversify our risks, we have gone into Bangladesh and Nepal,” LVEL CEO Sumitha Arangala told reporters yesterday, shortly after the company’s shares debuted on the Colombo Stock Exchange.
He also said LVEL is also looking at the East African region for expansions, particularly at hydropower prospects in Uganda.
According to Arangala, LVEL’S project partner for six megawatt hydropower plant in Kadawala, VS Hydropower (Pvt) Ltd.—who is doing a lot of engineering, procurement and construction (EPC) work in East Africa, particularly in Uganda—will assist them when exploring opportunities in this region.
LVEL already has thermal power investments in Bangladesh with a combined capacity of 250 megawatts and another 100 megawatt power plant is in the pipeline.
The firm also plans to invest Rs.465 million of its initial public offering proceeds (IPO) in a 10 megawatt hydropower plant in Nepal.
“So at this moment, Bangladesh will be our destination for thermal power and Nepal and East Africa for hydro,” Arangala said.
LVEL has investments hydro and wind power generation projects in Sri Lanka with a total capacity over 32 megawatts.
The company also expects to invest Rs.255 million of the IPO proceeds in two hydro power plants aggregating to 3.9 megawatts in Sri Lanka and has 10 megawatt wind power project in the Jaffna Peninsula in the pipeline.
Arangala said LVEL will pursue further investments in these sectors going forward and also actively seek investments in solar energy space. The government has announced an aggressive push towards renewable energy, specially solar energy, and is also banking on liquefied natural gas (LNG) for bulk of thermal power, moving away from coal and diesel.
The government is soon expected to call bids for the development of 90 megawatt mini solar plants and Arangala said LVEL will be placing bid for the project.
LVEL offered to sell 120 million ordinary voting shares at Rs.10 each in an IPO to raise Rs.1.2 billion. The IPO was oversubscribed on the opening day. The IPO proceeds will be used to settle debt and on planned new investments in Sri Lanka and overseas.