Laugfs invests Rs. 500 m in foray into mini hydro power sector

Friday, 7 January 2011 01:17 - - {{hitsCtrl.values.hits}}

Hot on the heels of its strategic deal with Bharat Petroleum, Laugfs Gas Ltd. yesterday said it was diversifying into mini hydro power generation industry under a new business entity and fully owned subsidiary Laugfs Power Ltd.

Hydro power to be generated from projects identified by Laugfs Power is to be connected to the National Grid through a Power Purchase Agreement (PPA) with the Ceylon Electricity Board (CEB).

The Laugfs Power Ltd. is already in the process of attending to preliminary procedures with a view to develop a mini hydro power plant at Ranmudu Oya in Imbulpe Pradeshiya Saba area, Balangoda. The potential power to be generated in this project is about 2 Mw under three phases.

The CEB originally had issued a Letter of Intent (LOI) for the project which would be taken up again when Initial Environmental Examination (IEE) is completed by the Central Environmental Authority (CEA). The IEE prepared according to the Terms of reference of the CEA was taken up by the committee recently and it will be re-submitted shortly with the amendments required by the committee. Once the IEE is completed and approved the company will be in a position to enter into an agreement with the CEB for a PPA.

Laugfs Power is also exploring other potential sites for development and it has earmarked around Rs. 500 million for investment in development of Hydro Power and other renewable energy sources. Also the company is in discussion with several promoters of mini-hydro projects with a view to acquire them and develop them into full-fledged power generating centres in the future.

On Wednesday Laugfs announced that it has signed an agreement with India’s energy giant and Fortune 500 company Bharat Petroleum to launch innovative metal cutting gas in Sri Lanka under the brand name Laugfs Bharat Metal Cutting Gas. Laugfs will have to pay quarterly under the agreement only a royalty fee of US$ 250 per metric ton or part thereof on the new product sold under the licence from Bharat Petroleum.

Laugfs will launch this innovative product which is much economical and safer metal cutting gas substituting Acetylene, with technical and operational collaboration of Indian giant.

Investors renew interest on Laugfs

Investors persisted with their renewed interest on Laugfs Gas Ltd for the second consecutive day though slightly lower in comparison to Wednesday. The voting shares of the Company yesterday peaked to a new high of Rs. 31.50 beating its previous best of Rs. 31 set on debut trading post IPO but closed lower at Rs. 30.70, up by Rs. 1.80 from Wednesday.

The non voting shares gained by Rs. 2.40 to close at Rs. 24.70 after peaking to a high of Rs. 25.40 mid-day. The latter category of shares is trading at all time high after it surpassed the previous best of Rs. 19 on Wednesday.

Voting shares gained by Rs. 2.40 and non voting by Rs. 3.20 on Wednesday.

Volumes trades were higher yesterday with 10.26 million voting and 5.86 million shares traded as against 7.2 and 3.2 million respectively on Wednesday.

Laugfs included Power & Energy sector was the best performing sector overall at the Bourse with a gain of 4.92% yesterday.