The Hindu Business Line : KSK Ventures setting up power plant in Maharashtra

KSK Energy has entered into an arrangement with Gujarat Mineral Development Corporation (GMDC), which has been allocated a coal block in Chhattisgarh, for the supply of fuel for the 540 MW project.

Hyderabad May 10 Targeting potential customers in `bulk industry sector', KSK Energy Ventures is setting up a 540-MW, coal-based power project, with an investment of Rs 2,400 crore at Warora in Chandrapur district of Maharastra.

The Hyderabad-based company has floated a special purpose vehicle (SPV) — Wardha Power Company Private Ltd (WPCPL) to execute it. The demand from the bulk industry sector is estimated to be around 65,000 MW, said Mr S. Kishore, Director, KSK Energy Ventures.

Finance

The initiative to provide power to industries in Maharashtra has achieved financial closure for the first phase of 270 MW. KSK Energy has sourced funds worth Rs 555 crore from Rural Electrification Corporation (REC), HUDCO (Rs 233 crore) and Indian Overseas Bank (Rs 100 crore) on loan basis.

The 270-MW (two units of 135 MW) project has been tied up with Viraj Profiles Ltd, which is also chipping in with equity along with KSK Energy (total equity of Rs 600 crore). A 25-year power purchase agreement at a uniform price negotiated already has been signed, Mr Kishore told newspersons while preferring not to disclose the price. The decision on supply of the balance power generated would be taken later.

The project being launched on Friday, is expected to start generating power from the first of the four 135 MW units planned in 24 months — May, 2009. The entire 540 MW capacity will become operational by end of 2009. The Chinese company, SEDC is supplying the equipment and all the clearances have been achieved for the project coming up on 94 hectares of land, he said.

Coal supply

KSK Energy has entered into an arrangement with Gujarat Mineral Development Corporation (GMDC), which has been allocated a coal block in Chhattisgarh, for the supply of fuel for the 540-MW project.

While GMDC will do the mining, it will retain the right to invest up to 26 per cent of the equity of the power project. The corporation has enough coal reserves to generate 1,750 MW, for which the arrangement has been tied up, Mr Kishore said.

KSK Energy, an emerging player, is also the only company in the bulk industry segment, which essentially helps industry get assured power as an alternative to individual captive power plants. The company, listed on the London Stock Exchange as KSK Power Ventur Plc, is targeting to establish about 4,000 MW by 2010 through various projects. It plans to raise $1 billion equity, of which about $500 million has already been committed by Lehman Brothers, the international investment banker, and a total project funds of around $3.5 billion. It has established 400 MW in eight states through various projects.

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