The Hindu Business Line : Greenfield coke project planned near Dharwad

ECOCOKE & Power Pvt Ltd, a company promoted by the former Executive Vice-Chairman of the Jindal Vijaynagar Steel Ltd plans to set up a greenfield coke project in Karnataka at an estimated cost of Rs 85 crore.

Dr S.K.Gupta, who was the Vice-Chairman of JVSL, the primary promoter of the project said a captive power plant of 20 MW would also be set up along with the coke ovens at an estimated cost of Rs 65 crore.

The project has obtained clearance from the Karnataka high-level committee, which sanctions projects worth over Rs 100 crore.

Mr Gupta has teamed up with the former Karnataka Commerce and Industry Secretary, Mr N. Viswanathan, and few foreign professionals with considerable experience in the steel industry to set up this project.

The coke plant will have a capacity of 2,80,000 tonnes, Mr Gupta said. The plant will be located at Dharwad Industrial Estate and have a ready market for coke from the JVSL, Klayani Forge and Bellary Steel Ltd, he added.

Of the proposed Rs 85 crore for the coke plant, Rs 34 crore will be equity component while the remaining Rs 51 crore will be debt.

PriceWaterhouseCoopers is syndicating debt, wherein ICICI and IDBI are likely to be the primary lenders. Promoters will chip in with Rs 11 crore, while another Rs 11 crore is likely to come as "strategic investment" from enterprises likely to be linked with the project. The remaining Rs 12 crore of equity is likely to be funded by venture capitalists.

"We are in talks with companies such as L&T, coal companies and prospective coke purchasers for strategic investment, while Canara Bank Venture Capital has agreed to part-fund the project in equity," Mr Gupta said. Talks with ICICI Venture Capital are also on.

The power project will be lease-financed by Power Finance Corporation and power purchase agreement is in the process of being finalised with Karnataka Power Corporation Ltd.

The technology, primarily sourced from Central Fuel Research Institute (CFRI) has been "upgraded and up-scaled" for this specific project by the promoters, Mr Gupta said. "This technology can be marketed in Brazil, Canada and US," Mr Gupta said.

Steel industry largely depends on imported coke and there is a supply crunch for this product, Mr Gupta said, adding that landing cost of imported coke is $325 (around Rs 14,706) per tonne.

Coke produced here with indigenous technology will be significantly cheaper to that of the imported coke, he added.

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