JSW Energy Ltd.

Credit rating agency, CARE has reaffirmed the ratings assigned to the bank facilities / instruments of JSW energy (JSWEL).

The ratings continue to derive strength from the promoter’s considerable experience in setting up and operating power plants, the company’s healthy liquidity position and presence of combination of long - term and short-term power off-take agreements. The ratings are further supported by successful implementation of projects and commencement of operations of additional capacities during FY11 (refers to April 1 to March 31) and the current financial year.

The ratings are, however, constrained by exposure to volatile fuel prices and fluctuating merchant tariffs, deterioration in the capital structure pursuant to the merger of a wholly-owned subsidiary with JSWEL, residual project implementation risk for the ongoing project in Raj West Power (RWPL) and contingent liability on account of unconditional undertaking given to lenders of RWPL for meeting cost overrun in the project.