Is Singapore switching its gear to offer foreign investors a piece of pie in the island’s power generation sector?

Tata Power, part of India's oldest industrial house, is looking to bid for three Singapore power generation companies. Temasek Holdings, the Singapore goverment's investment arm, is selling its interests in Tuas Power, PowerSeraya and Senoko Power. It has chosen to put Tuas on the block first. A Tata group source said it was evaluating the opportunity.

Temasek has invited offers to be submitted by the end of the year. It intends to complete the Tuas deal- valued between $2 billion and $3 billion - by next March. Tuas Power has a capacity of around 2,670mw and accounts for 26.1% of Singapore's electricity generation.

However, Tata Power is not the only one looking at Tuas Power. The Hyderabad-based GMR group is also bidding for Tuas, it is learnt. GMR intends to bid as part of a consortium including Australian financial services giant Macquarie. The Anil Dhirubani Ambani group, whose interests range from power to telecom, too is looking at the offer. Both GMR and ADAG were unavailable for comments.

Tuas Power has stable cash flows and is a well-managed company. It generated profits of $177 million in the year ended March 31 from revenues of $2.28 billion.

Sale of the three power generation firms is part of Singapore government's move to liberalise energy market. Temasek wants to sell the three separately to prevent too few players having too much power and also ownership of more than one such asset will require special regulatory approval. The three units supply about 90% of Singapore's Power and Temasek expects the entire transaction to be completed in the first half of 2009.

Indian utility companies have been expanding outside India by setting up greenfield power projects as well as tying up for raw material. Last month GMR Energy acquired 80% stake in Nepal's Himtal Hydro Power Company.

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