The Hindu Business Line : Ispat Ind to set up 600-MW unit in Chhattisgarh

Mumbai-based Ispat Industries is setting up a 600-MW coal-based power generation plant in Chhattisgarh and plans to raise around $500 million through foreign debt bonds for capacity expansion at its steel plant in Dolvi, Maharashtra.

The power plant, scheduled to commence production in 2011, will be set up in the Janjgir-Champa district of Chhattisgarh at an estimated cost of Rs 2,500 crore. While 300 MW would be generated for captive usage by the company at its integrated steel plant in Dolvi, the rest would be sold off locally to consumers.

"Electricity is one of our major inputs and this plant will result in providing us with greater control on our input costs," said Mr Vinod Mittal, Managing Director, Ispat Industries.

The project is proposed to be funded in a 70:30 debt-equity ratio. It is expected to generate a total employment of over 2,400. Of this, about 400 jobs will be direct and the remaining will be indirect. The company will float a special purpose vehicle to implement the power project.

A memorandum of understanding was signed on Thursday by Ispat Industries with the Chhattisgarh Government for setting up the power plant.

Speaking on the occasion, Mr Mittal said, "We would be requiring additional power in view of our decision to go for massive expansion in our steel making capacities."

Ispat Industries had signed a MoU with the Maharashtra Government last month for capacity expansion at its Dolvi plant at a cost of Rs 2,000 crore. The MoU envisaged increasing the company's capacity to 5.4 million tonnes (mt) a year annum from 3.5 mt. This Chhattisgarh plant is the second initiative of the company in the field of power generation. It had earlier planned to set up a 1,000-MW plant in Bhadravati in Karnataka.

Outlining the growth plans of the company, Mr Mittal said, "We will focus on gas and pipeline and auto components sectors."