Essar Power will initially acquire 76% of the existing equity with balance 24% being acquired upon completion of certain project milestones, the company said.
The coal-fired project is being implemented in two phases: the first phase of 1,050MW and phase two of 1,200MW at a total estimated capital cost of $2bn. The project includes the allocation of the Rampia coal block of 112 million metric tonnes and a 4.7 million metric tonnes per annum tapering coal linkage with Coal India.
According to the company, phase 1 of the project already has in place a number of approvals, including environment clearances. All other approvals, which include land acquisition, are being progressed. Phase 1 is expected to achieve financial closure by end of 2010.
Naresh Nayyar, CEO of Essar Energy, said: “Navabharat Power is a major part of our power phase II development projects. This acquisition is in line with the plans announced at the time of our IPO and will keep us on track to develop over 11,000MW of power capacity by the end of 2014, thereby maintaining our leading position in the private sector power generation market in India.”
