The Hindu Business Line : Mahagenco signs MoU for power projects expansion

Capacity hike
The Parli and Paras power plants expansion would create two units of 250 MW each and would cost Rs 2,315 crore.
The Khaperkhed plant expansion would create one unit of 500 MW and would cost Rs 2,170 crore.
The expansion at Bhusawal plant would create two units of 500 MW each and would cost Rs 4,124 crore.

(FROM LEFT) MR DILIP VALSE PATIL, Minister of Energy, Maharashtra, Mr Ajoy Mehta, Managing Director, Maharashtra Power Generation Co Ltd, Mr Vilasrao Deshmukh, Chief Minister of Maharashtra, Mr R.R. Patil, Deputy Chief Minister, and Mr Anil Lakhina, CMD, Rural Electrification Corporation Ltd, at the signing of the MoU in Mumbai on Tuesday. — Shashi Ashiwal

Mumbai , June 20

Maharashtra State Power Generation Company Ltd (Mahagenco), the generation arm of the unbundled Maharashtra State Electricity Board, on Tuesday signed a memorandum of understanding with Power Finance Corporation Ltd (PFC) and Rural Electrification Corporation Ltd (REC) for financing four projects having a combined capacity of 2,000 MW with a total cost of Rs 8,609 crore.

All the projects are coal based and the fuel would be sourced from domestic mines. The projects are capacity expansion of the existing power plants. At the Parli and Paras power plants, the expansion would create two units of 250 MW each and it would cost Rs 2,315 crore. The Khaperkhed plant expansion would create one unit of 500 MW and would cost Rs 2,170 crore. The expansion at Bhusawal plant would create two units of 500 MW each and would cost Rs 4,124 crore.

Speaking on the occasion, Mr Ajoy Mehta, Managing Director of Mahagenco, said the projects would require 10 million tonnes of coal per annum for which fuel linkages with mines in Orissa have been established. Work on all the projects would start in the next two months and by November 2008, Parli and Paras would be operational. The additional capacity in Khaperkhed plant would be operational by November 2009. The Unit 1 at Bhusawal plant would be operational by December 2009 and Unit II by February 2010, he said.

"All the major environmental and civil aviation clearances from the Union and the State Government have already been obtained. Tenders from Bhuswal and Khaperkhed plant have already been floated," Mr Mehta said.

Funding pattern

The projects would be financed with a debt equity ratio of 80:20. The 20 per cent equity in the projects would cost the Maharashtra Government Rs 1,722 crore.

The REC would finance 80 per cent of the Bhusawal project at Rs 3,300 crore. The PFC would finance Parli, Paras and Khaperkhed projects at Rs 3,471 crore.

The loan shall be repayable over a period of 10 years from the date of commissioning of the projects and it would carry an interest rate of 9.75 per cent per annum.

Also speaking on the occasion Mr Dilip Walse-Patil, Maharashtra's Energy Minister, said the State's ranking in power infrastructure investment has risen from the 12th to eight position in the last one year.