Monday, April 23, 2007

Jindal's Power projects along the western India

JSW to invest Rs 15K cr in thermal power
Sumana Guha Ray / Mumbai April 22, 2007

JSW Energy, the energy arm of the Sajjan Jindal Group, will invest close to Rs 15,000 crore in the next two to three years in thermal power projects in the western part of the country. The company is aiming at increasing its power generation capacity to 5,000 mw from the current 260 mw.

JSW Energy is looking at investing in hydel power plants in Himachal Pradesh and the north east, while extending its presence in the transmission and trading sector to “become India’s largest integrated player in the power sector by the end of the 11th plan (2012),” said the company’s joint managing director and chief executive officer Raaj Kumar.

The company has formed special purpose vehicles for the development of thermal power plants in Rajasthan, Karnataka, Maharashtra and Gujarat. “We have also been actively participating in bids for the development of a transmission network in the country and we already have an in-house power trading wing, JSW Power Trading Corporation based in Delhi,” Kumar added.

The debt-to-equity ratio for these investments would be 75:25. The company has already tied up with several Indian banks for the purpose. The equity component would be funded mostly through internal accruals and carbon trading, Kumar said. The company has already signed a memorandum of understanding with Gujarat for developing a 2,000 mw imported coal-based plant at Simar in Junagarh district. The land survey for the project has been completed and a consultant has been appointed for a techno-economic feasibility study for this port-based power plant, said N K Jain, vice-chairman of JSW Energy. The estimated investment in this project would be Rs 4,800 crore.

JSW has also undertaken brownfield expansion of two units of 300 mw each in Vijaynagar, where it already has a 260 mw generation unit and operates and maintains another 290 mw facility, Kumar said. This plant is expected to be commissioned by December 2008 and would involve an investment of Rs 1,860 crore. The company has already tied up with IDBI for funding.

A third imported coal-based plant would be developed at Raigad in the district of Ratnagiri in Maharashtra. The plant capacity would be 1,200 mw and the investment close to Rs 4,500 crore. JSW has already acquired 1,000 acres for the project. It has already received the ‘no objection’ certificate from the Maharashtra Pollution Control Board and the Ministry of Environment and Forests is expected to provide the certification soon. The construction is expected to begin soon, and the first unit of 300 mw would be commissioned within 27 months from the time of the construction.

The coal requirements would be four million tonne for every 1000 mw thermal power generated. By 2010-11, the company would be importing approximately 15-16 MMT of coal. To ensure fuel security, JSW is looking at acquiring coal blocks in Indonesia, where it already has a stake in a coal block with a yield of 1.5 MMT, Kumar said.

In Rajasthan, JSW is in the process of setting up a lignite-based 1080 mw power plant at an investment of Rs 3,500 crore. The company has already signed power purchase agreements with distributors in Rajasthan for 1000 mw, at a 30-year levelised tariff of Rs 1.91 per unit, excluding escalations. The first year tariff would be Rs 2.28 a unit, while the fuel cost would be between 80 paise and Re 1 a unit, Jain explained.

This project will have eight units of 135 mw each, the first of which is expected to be commissioned by the fourth quarter of 2008.

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