In order to increase its power generation capacity up to 6,000 MW, India-based Essar Power, part of the Ruia family-controlled conglomerate, has chalked out investment plans of worth INR200 billion over the next three years, reported Economic Times.
The Ruia family will contribute INR 50 billion as equity to the expansion plan, which will have a debt-equity ratio of 3:1. Anshuman Ruia, Director of Essar Group, said: “The power sector is the next biggest growth sector after telecom in India and the Essar group plans to leverage the opportunity by operating large power plants. The company is in the process of raising INR150 billion in debt for financing four power projects — three thermal plants and a co-generation plant — that the group will build by 2012. We are in advanced stage of raising debt from the public and private lenders, including State Bank of India and Power Finance Corporation.”
The projects include 1,200 MW coal fired thermal power plant in Madhya Pradesh, a 1,200 MW coal based and a 900 MW gas and liquid fuel power plant in Gujarat and another 1,200 MW coal fired power plant in Jharkhand. The company has entered into power purchase agreements with the respective state electricity authorities and even obtained clearances.
“To reduce dependency on third-party fuel, the company has finalised fuel linkages for all plants, including overseas linkages for imported coal, from Indonesia and Mozambique mines. In India, it has been awarded two captive coal mines at Chakla and Ashok Karkata in Jharkhand. This will reduce risks,” Mr. Ruia added.
