Revenues (EUR m) 2.8 2.6 +10%
EBITDA (EUR m) -1.4 -1.6 +15%
Net Income (EUR m) 3.6 0.5 +566%
Shareholders’ Equity (EUR m) 121 118 +2%
Cash and Financial assets 103 98 +5%
Hydropower Concession Portfolio 586 MW 586 MW 0%

Velcan Holdings Group closed 2019 with a net result, Group share, of EUR 3.6m compared to EUR 0.5m in 2018. This increase of results essentially stems from net financial gains, which amounted to EUR 8.1m in 2019 mostly because of the overall good performance of the financial markets in 2019 and the USD appreciation (2% compared to end of 2018). This gain of 8.1m compares to EUR 3.1m in 2018.

During Fiscal Year 2019, VELCAN HOLDINGS Group continued developing its hydropower concessions located in India (571 MW), and operated its Rodeio Bonito hydropower plant (15 MW) in Brazil.  Given the uncertainties of the Indian hydropower market and the difficulties encountered, an additional provision or Eur 2. 2 million (15%) has been decided for FY 2019 on the intangible value of the Indian projects. This brought the total provision to Eur 4.4 million (30%), considering the previous provision booked in 2017 (EUR 2.2m).

The Rodeio Bonito plant generation was stable compared to 2018. The generation remains very moderate due to precipitation levels still below historical average in 2019. At constant foreign exchange rates the turnover has grown (+13%) thanks to the inflation on selling prices. In Euro the turnover is up by 10% (EUR 2.8 m in 2019 vs EUR 2.6 m in 2018) with a stabilization of the Brazilian currency in 2019 (-3%). The EBITDA is up by 15% (EUR -1.4 m in 2017 vs EUR -1.6 m in 2018).




The Group continued to develop the hydroelectric concessions obtained in 2007 in the State of Arunachal Pradesh, focusing on the main next development steps of the advanced stage Heo-Tato-1 tandem (426 MW). These steps are the land acquisition, the development of the transport infrastructure, the amendment of the concession agreements, the stage 2 Forest Clearance and the preliminary search for a bankable Power Purchase Agreement (PPA). Sub-surface geological investigations were restarted at the Pauk hydroelectric project power house site.

During 2019, the land acquisition conducted by the State Government continued to progress, with the issuance in September of the Section 11 Notification, which marked the completion of the first phase of the procedure. It was a major milestone as it required the consent of the land owners and enacts the State Government decision to acquire the required land (totaling 107.20 Ha) for public purpose. However, the land survey and marking of boundaries, which is constitutive of the procedure next step (Section 19) and required to establish the final list of land owners, was scheduled between 10th February and 14th March 2020 and was suspended. Several land owners physically prevented the District administration team to start the survey, claiming about land ownership disputes and immediate payment of financial compensations.

Following this incident, the District Administration has suspended the survey until further notice and constituted a special committee of Government officials, for the purpose of handling the land survey. A first meeting has been held, between the local land owners and the committee, on 24th February 2020. During such meeting the Group’s team detailed all the financial benefits for the local people, attached to the project implementation. However the land owners claimed again for immediate payments of benefits not related to site activity and no agreement could be reach between the Government and the owners to restart the procedure. Another meeting was scheduled on 24th March 2020 with the Government committee, but it was thereafter cancelled due to Covid-19 outbreak.

This incident illustrates the long pending and highly sensitive issue of land ownership in the project area. It materializes difficulties encountered by the local Government to secure the physical access to the land, necessary to perform site works, often impeded despite favorable administrative decisions that are weakened or made ineffective by the lack of Law and Order enforcement on the ground.

As of the date of this report, in view of the Covid-19 outbreak and the related confinement measures adopted in India, the meetings between the Government committee and land owners have been suspended until further notice, and the overall procedure could not be restarted.

The road infrastructures upgrade works, which will be necessary to transport the construction equipment, have progressed at a slow pace during 2019. No progress has been made by the Central Government regarding the fastening of the overall completion schedule. The completion dates are still scheduled theoretically in 2022, but will most likely face significant delays of 2 to 3 years given that, for some stretches, the technical studies have not yet even been completed.

The Group continued to conduct its preliminary search for a Power Purchase Agreement (PPA) during 2019. All the major Indian power traders (PPA brokers) contacted declined to take up the search for a PPA for Heo and Tato-1. The reason given is the lack of appetite of the market and the lack of feasibility for long term hydropower PPAs. The commercial and financial market conditions have remained the same and still do not fulfil the requirements for the long term sale of hydropower, as the market remained constrained by the lack of proper regulatory framework for the sale of hydropower through long term bankable PPAs, the indirect competition from cheap solar power and the stressed financial position of electricity distribution companies (DISCOMS). Grid stability and the requirement for peak power have also become a growing issue for Run-of-the-River (ROR) hydro projects such as Heo and Tato-1 HEPs.

As to tariff competition, some auctions still touched as low as Rs 2.50 per unit in 2019 for solar power (like in 2018) and Rs 2.82 for wind projects, whereas most competitive hydro power projects are often significantly more expensive, although their lifespans makes them cheaper on the long term. Heo and Tato-1 HEPs tandem have an estimated weighted average levellized tariff of INR 4.77[1], which is competitive in the hydro space but much higher than solar power, although these figures are not totally comparable when considering the lifespan of both energy sources.

The requirement for energy storage is another trend that has emerged recently. Because India has implemented a lot of solar and wind in recent years, by definition non flexible and without storage capacity, the power-transmission grid faces stability issues and the requirement for an overall supply of guaranteed electricity is not fulfilled. Pressure is growing for both flexible generation and peak time[2] supply on any new renewable energy procurement[3].

If this trend is confirmed, a PPA for Heo and Tato-1 tandem (pure Run-Off-River project without storage / peaking capacity) separate from Pauk HEP’s (which would provide peaking to the entire cascade) PPA, hence with no peak time guaranteed, could be of no interest for the distribution companies. In such case it would not be conceivable anymore to start Heo and Tato-1 HEPs independently from Pauk. In such case, the 3 projects would have to be implemented at the same time, which would have a significant negative impact on the timeframe of the projects[4].

The Government of India has undertaken to reverse the above negative market scenario by publishing on 7th March 2019 a new hydropower policy which features main measures such as a Hydro Purchase Obligation (HPO) to be imposed on distribution companies or plans to reduce the hydropower tariffs in the first years of the PPA to make it more attractive to power purchasers. However, after more than a year, the policy is practically not in force as the implementation modalities remain to be seen. The Company is following up closely the evolution of this new framework.

The provisions of this new hydro policy, especially the envisaged HPO, could result in creating immediate demand for the generation from the R-o-R projects like Heo and Tato-1, if application rules are issued soon and with favorable terms, and subject to the financial capabilities of DISCOMS and banks.

If such demand is not created by a regulatory HPO, Heo and Tato-1 will have to wait for Pauk HEP to come along with a storage solution so the entire cascade can offer peak power. The Group estimates that it will take 6 to 8 years to complete Pauk development and another 5 years to build it, subject to other project requirements being available, such as an appropriate regulatory framework for selling hydropower, a restored solvency of the DISCOMS, a renewed appetite for long term bankable hydro PPAs, land acquisition completed, available roads and transmission lines.

It is difficult to factor in the uncertainties rising from such requirements and other issues like the overall power demand, the grid stability issues and the electricity storage market because all these factors fall beyond the Group’s control. Overall, Velcan Holdings believes that the Government of India is aware of the long term benefits of hydropower and the necessity to increase its share in the energy generation mix of such a large market, like China and Brazil did for example. This awareness is illustrated by the policy released in March 2019, even though the implantation regulation is not yet issued.

The Group continues to see long term promising prospects in the Indian electricity and market and has most of the cash and equivalents required for funding the equity of the project upon reaching a bankable PPA. However, the Group is not in a position to assess the timeframe and the scale of the various delays which are or will be encountered.

In view of the uncertainties of the Indian market and the delays encountered, an additional provision or Eur 2.2 million (15%) has been decided for FY 2019 on the intangible value of the Indian projects. This brings the total provision to Eur 4.4 million (30%), considering the previous provision booked in 2017 (EUR 2.2m). The issues and factors related to the Indian projects have been detailed under chapter I.4.1 of the annual report 2019 available at


The production of 49 113MWh during 2019 (against 49,987 MWh in 2018, -2%) was again moderate due the rainfall in Rodeio Bonito catchment area being still well below the historical long term average. This reflects again low precipitation levels in Brazil in 2019 although not as low as in 2018 in the whole country. This resulted in a lower negative impact amounting to BRL -0.8m in 2019 for Rodeio Bonito (compared to BRL -1.5m in 2018 where the precipitation levels were low in entire Brazil). Translated in Euros, the consumed purchases (Mainly MRE, Ensured Energy Mechanism) impacted the annual operational result by EUR 0.2 m in 2019 against EUR 0.4 m in 2018.

The operation and maintenance of Rodeio Bonito are satisfactory with a technical availability of 99% for 2019.

The turnover has increased by 10% when expressed in Euro and by 13% when expressed in BRL in 2019 (EUR 2.8m or BRL 12.6m) compared to 2018 (EUR 2.6m or BRL 11.1m) thanks to the inflation on electricity selling prices.

The EBITDA (earnings before interests, taxes and amortization) of the plant amounted to BRL 9.3m against BRL 7.3m in 2018. When converted in EUR, the EBITDA was up to EUR 2.1m vs 1.7m in 2018, mostly due to the higher turnover and the lower MRE payments. The Group is not developing any other project in Brazil as of 31st December 2019.

Financial Assets

The Group has kept managing its treasury to cover the operational costs and provide financial returns. The Group has invested over the years in an extremely diversified array of financial assets including mostly : corporate and government bonds in local and reserve currencies, equities, derivatives, direct lending and private equity investments.

In 2019, the group main investments have been mainly in corporate bonds again. The exposure in corporate and government bonds has further increased over 2019 to reach 57.4m at year end (50.1 m at 2018 year-end). The Group is mainly exposed to issuers in the BBB, BB, B and Non Rated categories (as defined by Standard & Poor’s). The maturities span a wide range. The majority of the bond portfolio has a maturity of less than 6 years. There are however a few that are of perpetual nature. In 2019 the group invested in majority in USD bonds, from issuers coming both from developed markets and emerging markets.

At constant exchange rates, the performance on the bond investments was impacted by the holding in the Republic of Argentina. Apart from that, these bond investments had performed very well in 2019. The Group also benefited from the strengthening of the US dollar. The Group evaluated that the prices of some of the bonds it held as of year-end 2019 where high and provided more downside than upside risk. These bonds were sold or let expire without reinvestment. As on 31/12/2019 the bond portfolio had a value of Eur 56.6m (excluding accrued interests). On the 14th of February the bond portfolio had been reduced to Eur 42 m (excluding accrued interests). Since then the current market crisis linked to the covid-19 epidemic has significantly decreased the value of this portfolio. As of the 14th of April, these same bonds had a value of EUR 36.1m to which an additional 0.4 m has been added for a total value of EUR 36.5 m. The decrease is of approximately 14% since mid-February, which is in the range of the market decline for such bonds. The Group does not expect to sell most of these bonds in the short term. Thanks to the US Federal Reserve announcements the news flow has been more positive on the High Yield Bonds asset class recently. But it has to be noted that this is still an illiquid asset class where prices are more difficult to ascertain than before. The Groups relies for its evaluation on information from its banks and the Reuters system. Among others the current situation has increased the riskiness of the exposures of the Group to the Republic of Argentina, the CMA CGM Group, Trafigura and NordLB.

As of 31/12/2019, the Group also owns private investments worth EUR 2.8m including private equity and direct lending. Most part of Private equity and direct lending investment are invested in the shipping sector. Given the recent poor performance of this sector these investments have contributed negatively to the performance of the Group between 2016 and 2019. This include a senior secured loan to a third party for financing the acquisition of an oil and chemical tanker, on which the borrower has defaulted due to the arrest of the vessel in Nigeria by other alleged creditors. The principal amount plus various recoverable expenses related to the recovery of the said loan amounts due under the restructured loan is USD 5.2 m, on which a partial impairment has been booked in the accounts. Due to litigations, the impairment amount is kept confidential. The Group is actively monitoring these investments.

As of 31/12/2019, the Group had investments worth EUR 6.7 m in listed equities of which EUR 2.4 m were equity shorts to hedge the portfolio holdings and EUR 0.9 m in Gold ETFs and gold mining equity. Until the Covid-19 related crisis, the Group believed the equity markets provided no sufficient reward vs the risks entailed by their price level. Given the market turmoil and heavy decreases of listed equity price levels, the Group increased its equity exposure to listed equity in 2020. As of the 14th of April 2020, the general equity exposure was of EUR 21.1 m, of which EUR 6.97 m where equity shorts to partially hedge the portfolio holdings. In addition to this, the Group held in its commodity asset class EUR 5.4m of Gold ETFs and gold mining stocks. Depending on stock market evolutions, the Group may increase further or decrease its equity exposure.

The Group has divested its position in hedge funds, which was EUR 7.9 min 2018.

Additionally, as of December 2019, the Group had investments worth EUR 8.2 m in US T-Bill (having less than 3 months maturity). As of December the Group financial assets were mostly exposed to the US Dollars.

Finally a significant part of the treasury of the Group was kept in cash or cash equivalents (EUR 27.2m equivalent) of the end of 2019. Recent movements in US Treasury rates means that EUR 8.3m of the cash was placed in Treasury Bills and EUR 19m in shorter term deposits

Foreseeable evolution of the Group:

After the closing of this financial year, the Group is pursuing the following main objectives as a priority for FY 2020:

  • Pursuing the development of the Indian hydropower projects with the objective to build them as soon as possible. However the implementation timeframe cannot be ascertained given the current uncertainties of the Indian hydropower sector.
  • Continue the diversification of its financial investments;

The ability of the Group to pursue these objectives is subject to the evolution of the current Covid-19 crisis, which may affect both the development of the Indian projects and the financial portfolio.


 Income Statement (unaudited consolidated)

Turnover amounted to EUR 2.8m (against EUR 2.6m in 2018, a 10% increase), mainly from electricity sales. The turnover in local currency increased by 13% with inflation on electricity sale prices. The depreciation of the Brazilian currency vs the Euro currency was responsible for a 3% decrease.

Current operating results amounted to EUR -4.3m (against -2.8m in 2018):

  • Payments by Velcan for the MRE (Energy Reallocation Mechanism) were EUR 0.2m in 2019 vs. EUR 0.4m in 2018.
  • Depreciation and amortization of tangible and intangible assets of Rodeio Bonito plant amounted to EUR 0.7m (EUR 0.7m in 2018), while depreciation on intangible projects under development was EUR 2.2 m due to the provision passed on Indian projects in 2019, vs an amount of NIL in 2018.
  • Staff expenses amounted to EUR 2.6m in 2019 vs EUR 2.9m in 2018. The Group employed on average 21 permanent employees in 2019.
  • External expenses were stable and totaling EUR 1.5m in 2019, like in 2018

Net Financial Gain for the group amounted to EUR 8.1m in 2019 mostly because of the overall good performance of the financial markets in 2019 and the USD appreciation (2% compared to end of 2018) and its impact on the Group’s cash and financial assets position. This gain of EUR 8.1m compares to EUR 3.1m in 2018.

In 2018, other operating income consisted mainly of divestment gains on Indonesian assets while the costs were fully impaired (EUR 0.5m of gain in 2018). This figure was NIL in 2019 as no divestment on projects was made.

Income tax expense was stable and amounted to EUR -0.2m in 2019 like in 2018.

The net result, Group share, was EUR 3.6m in 2019 FY compared to EUR 0.5m in 2018 FY.

The Group’s EBITDA (earnings before interests, taxes, depreciation and amortization) reached EUR -1.4m compared to EUR -1.6m in 2018. The slight depreciation of BRL (-1.2%) and INR (Indian Currency – -0.3%) rates when compared to Euro, at 2019 closing date, has slightly negatively impacted the other comprehensive income, as the Group’s main investments (tangible and intangible) have been done in local currency (EUR -0.1m in 2019 against EUR -1.7m in 2018). The total comprehensive income amounts to EUR 3.4m in 2019 against EUR -1.2m in 2018.

Balance sheet – Assets (unaudited consolidated)

Net intangible assets stands at 11.9m in 2019 and are down by EUR 1.7m versus 2018, mostly because of the provision of EUR 2.2m of Indian assets. Net tangible assets stands at 8.0m in 2019 and decreased by EUR 0.7m between 2018 and 2019, mainly because of depreciation of the Rodeio Bonito plant (EUR -0.7m).

Cash, cash equivalent assets and financial assets have increased from EUR 98m in 2018 to EUR 103m in 2019 (+5%) mainly thanks to the good performance of the Group’s financial portfolio and despite the share buyback programs. Financial assets are mainly consisting in listed bonds as of year-end.

Finally total assets increased by 2.4% during 2019 FY (up by EUR 2.9 m).

At 31st December 2019, the Group (Velcan Holdings and its subsidiaries) holds 146,900 own shares (2018: 468,862), which include the shares purchased under the third buyback program (7,050 shares) and 138,850 shares previously held by Velcan Holdings. At year end closing price of EUR 6.52 those own shares have a market value of EUR 1 m.

Balance sheet – Liabilities (unaudited consolidated)

Non-current provisions amount to EUR 0.8m at 31st December 2019 and arise from litigations related to the 2 biomass plants previously owned by the Group (Satyamaharshi SMPCL – 7.5 MW and Rithwik RPPL – 7.5 MW, owned between 2006 and 2010). The existing provision represents the major part of the claims covering as well accumulated interests and judicial expenses.

Own shares, booked directly against the Equity of the Group at their historical cost, reduce the net shareholder’s equity of the Group by EUR -1.2m versus EUR -3.9m at 31st December 2018 following the share buyback programs, the capital reductions and the use of shares to cover share based payments.

As at 31st December 2019, unrealized losses on conversion reserves, booked directly against Equity amounted to EUR -9.6m versus an unrealized loss of EUR -9.5m at 31st December 2018, as the BRL and INR currencies were relatively steady VS EUR currency in 2019.

With a consolidated equity of EUR 121.1m (+EUR 2.9m compared to 2018), the Group still has no significant debt as of 31st December 2019. Various provisions, payables and financial instrument liabilities amount to EUR 2.4m (vs EUR 2.4m 2018), including the non-current provisions described above.

The full annual report 2019 is available at:




Balance Sheet – Unaudited


ASSETS (EUR ’000) 2019 2018
NON-CURRENT ASSETS 22 946 25 872
 Intangible Assets 11 923 13 630
Tangible Assets[5] 8 023 8 674
Non-Current Financial Assets 3 000 3 567
Other Non-Current Assets
CURRENT ASSETS 100 547 94 776
 Current Financial Assets 72 854 63 839
Cash and Cash Equivalents 27 168 30 383
Other Current Assets 525 554
TOTAL ASSETS 123 493 120 647
LIABILITIES (EUR ’000) 2019 2018
Equity (Group Share) 121 088 118 213
Minority interests 0 8
TOTAL EQUITY 121 088 118 220
Bank Debt
TOTAL LIABILITIES 123 493 120 647


Income Statement (EUR ’000) – Unaudited

2019 2018
Revenues 2 846 2 580
Operating expenses (4 246) (4 727)
Amortizations, depreciations and Provisions (2 876) (696)
Ordinary Operating Result (4 277) (2 843)
Other operating Income 9 514
Operating Result (4 268) (2 329)
Net Financial Income (Loss) 8 108 3 071
Tax Income (Expense) (244) (203)
Income – Minority Share 0 (12)
Net Income – Group Share 3 596 552
EBITDA (1 392) (1 633)




Balance Sheet


ASSETS (EUR ’000) 2019 2018
FIXED ASSETS 150 492 150 734
CURRENT ASSETS 6 609 3 255
Debtors & prepayments 117 189
Investments[6] 4 916 2 021
Cash at bank and in hands 1 576 1 045
TOTAL ASSETS 157 101 153 988
LIABILITIES (EUR ’000) 2019 2018
CAPITAL AND RESERVES 119 527 122 099
Creditors 37 569 31 885
TOTAL LIABILITIES 157 101 153 988

Income Statement (EUR ’000)

2019 2018
Gross profit or loss (859) 544
Value adjustments (90)
Income from other investments & loans forming part of the fixed assets 537 543
Other interest receivable and similar income 3 1
Value adjustments in respect of financial assets and of investments held as current assets 1 510 (536)
Interest payable and other similar expenses (164) (1 230)
Other taxes (5) (5)
Profit or Loss for the financial year 1 022 (772)

*          *          *

[1] Indicative figure based on an example of commissioning that would occur in 2027, which is subject to the real date of commissioning and to the Central Electricity Regulatory Commission approval of final costs post construction, which may suffer overruns. The 2027 COD is only an example date necessary to calculate escalation of costs and then completion cost. It is NOT a forecast of the COD, which the Group is not in a position to provide for the reasons mentioned in this report.

[2] The so-called “peak” electricity is supplied during a peak in electrical consumption, when the consumption of an electrical network is highest during a defined period (usually it refers to specific daily hours in India), and must therefore be guaranteed for a given schedule.

[3] See recent SECI ­­­­­­call for tender for 1,2 GW, won by Greenko and Renew Power. The bidders were required to bid for solar power along with some stored predictable power. Greenko placed a mixed bid with both solar and pumped hydropower.

[4] Strategically the Pauk HEP was designed from the beginning with a reservoir for diurnal storage able to ensure peak time generation for the entire cascade, but this made the project technically more challenging and longer to develop. In addition the Pauk HEP land area is subject to several local inter-clan disputes which make the site access more difficult. As a result the Pauk HEP suffered important delays.

[5] Almost exclusively constituted of the Rodeio Bonito Hydro Power Plant asset

[6] Own Shares

* * *

Investor Relations Contact:

About Velcan:

Velcan Holdings is a Luxemburg headquartered investment holding company founded in 2005, operating as an independent power producer in emerging countries and managing a global portfolio of financial assets.

The company owns and operates a 15MW hydro power plant in Brazil that it developed and built in 2009. The company is developing a cascade of hydropower concessions located in India and totalling 571 MW.

Hydropower concessions provide long periods of cash generation but their development outcome is uncertain and many years are needed to bring these projects to maturity in emerging countries: it involves field studies in remote places, obtaining the necessary authorizations and permits, and land acquisition in political and regulatory environments that can be unstable or heavily hampering. Meanwhile Velcan Holdings actively manages its treasury, investing in listed and unlisted financial instruments.

Velcan Holdings’ headquarters are in Luxemburg, with administrative and financial offices in Singapore and Mauritius. The team dedicated to the development of the Indian hydropower cascade is based in New Delhi and at the project site (Arunachal Pradesh). The team dedicated to the Rodeio Bonito plant is based in Sao Paulo and Chapeco (Santa Catarina State).

The company was launched more than 15 years ago by its reference shareholder Luxembourg Hydro Power SA, owned by Velcan Holdings’ management team.

Velcan Holdings is listed on the Euro MTF Stock Market in Luxembourg (Ticker VLCN/ISIN FR0010245803).

Velcan Holdings never performed any Public Offer as understood under Directive 2003/71/CE of the European Parliament and Council.


This press release contains prospective information about the potential of the projects in progress and/or of the projects of which the development has begun. This information constitutes objectives attached to projects and shall not be construed as direct or indirect net income forecast of the concerned year. Reader’s attention is also drawn on the fact that the performance of these objectives depends on future circumstances and that it could be affected and/or delayed by risks, known or unknown, uncertainties, and various factors of any nature, notably related to economic, commercial or regulatory conjuncture, which occurrence could be likely to have a negative impact on future activity and performances of the Group.

This announcement does not constitute a public offering (“offre au public”) nor an invitation to the public or to any qualified investor in connection with any offering. This announcement is not an offer of securities in the United States of America or in any other jurisdiction/country.