The Hindu : ALF subsidiary to develop wind energy

Online edition of India's National Newspaper
Sunday, May 04, 2003

Business

Business

ALF subsidiary to develop wind energy

By Our Staff Reporter

<167,4p,1>CHENNAI, MAY 3. Ashok Layland Finance (ALF) is setting up a wholly owned subsidiary to play a facilitator role in the development of wind energy.

A new company, Alfin Wind Energy, has already been formed with an equity capital of Rs. 1 crore.

Alfin Wind will facilitate the leasing of the wind energy equipment by identifying the right financial institution and the power-seeking corporate clients. Described as a three-way `win all' situation, the subsidiary's move is expected to help lending institutions like banks to get into a newer income-earning area, the corporate consumer to pare power use cost and the ALF outfit the opportunity to earn fee-based revenue by undertaking operation and maintenance work.

Under the arrangement, the leased equipment will remain in the books of the lender (lessor) for seven years. Subsequently, the depreciated equipment will be transferred to the books of Alfin Wind Energy.

The new subsidiary will invest about Rs. 80 crores in wind farm development in the current year. At present, ALF has nearly 65 machines, generating 17.2 MW of power.

According to the Managing Director, S. Nagarajan, ALF will also start its insurance broking business in the current year. It will operate as a broker for all major insurance companies and will earn a fee-based income on premiums remitted through it.

These two new subsidiaries are expected to generate a dividend income of Rs. 4 crores to ALF.

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