JSW Energy ties up with Chinese firms 20 Oct, 2007, 0047 hrs IST,Nevin John, PTI
MUMBAI: JSW Energy, a Sajjan Jindal group company, has tied up with Chinese electrical equipment makers Shanghai Electric and Dongfang Electric Corporation for importing equipment for JSW’s upcoming power projects. The company has allocated Rs 3,500 crore for sourcing the equipment for the 4,000-MW power projects.
“The construction for the three projects has begun and the shipment of equipment will start in a couple of months,” said JSW Energy vice-chairman NK Jain. The company is investing Rs 11,000 crore for setting up the three projects, that includes a 600 MW coal-fired project at Vijaynagar in Andhra Pradesh, a 1,200 MW coal-fired project at Ratnagiri in Maharashtra and a lignite-based 1,000 MW project at Barmer in Rajasthan.
The Chinese major, Dongfang, already has a JV with Tata Power, the largest private power company in India, for setting up ultra mega power project (UMPP) in Mundra. For forthcoming UMPP bids also, Dongfang is expected to participate with the Tatas, while Shanghai Electric is supplying equipment for the engineering, procurement and construction projects of Reliance Energy.
Equipment such as boilers and turbines account for 35% of the total project cost, say industry analysts. “While spending Rs 4 crore for 1 MW coal-fired project, about Rs 1.5 crore is needed for equipment. The rest of the expenses are mainly for land, foundation, civil works, small machinery, margin on working capital, pre-operation and contingency,” said Kamlesh Kotak of Asian Securities.
JSW Energy is already operating a 260 MW power plant in Vijaynagar. It sells 60 MW to group company JSW Steel, and 200 MW to other utilities. JSW Steel owns a 230 MW plant separately for its captive use, but it’s operation and maintenance are done by JSW Energy. Apart from the coal and lignite-fired plants, the company is also setting up a 260 MW hydel project in Himachal Pradesh.
“The company has achieved financial closure for all its power projects,” said Mr Jain. A consortium comprising 12 banks and financial institutions has participated in providing a loan of Rs 3,750 crore for the Barmer project, which has achieved closure now. The total cost of the project is estimated at Rs 5,000 crore,” he added.