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IOC plans to double Savli power plant capacity

Archana Chaudhary

MUMBAI, Dec. 12

INDIAN Oil Corporation Ltd plans to double the capacity of its proposed 500 MW power plant at Savli in Gujarat.

The expansion of capacity to 1000 MW is in response to increased demand for power generated at the plant. ``The Madhya Pradesh Government has shown interest in buying power generated at the plant,'' a senior IOC official said.

Originally the power plant was to sell its entire capacity to Gujarat. But there could be a change of plans, according to officials. ``There are other possibilities. We may sell power through the Western grid,'' the official said.

Gujarat had picked up 11 per cent equity in the project through Gujarat Power Corporation Ltd in March this year. IOC and Mitsubishi Corporation of Japan hold 26 per cent equity each according to an agreement signed in March 1999. The rest of the equity will be held by the public or financial institutions.

``We are still in the process of forming the company and the picture will be clearer by the end of this month,'' an official in charge of project implementation said.

IOC will contribute capital of about Rs 350-400 crore and the debt-equity ratio is expected to be 70:30. The total cost of the project may go up to Rs 2,500 crore.

The company has lined up German consultant company, Steag, to work out the financial and EPC details of the project which is scheduled to come up in the 10th Five Year Plan. The company will `soon' appoint EPC contractors through international bidding, t he official said.

The plant will use `vacuum residue' from IOC's Gujarat refinery as feedstock. ``This residue we get after extracting low sulphur heavy stock, is of high calorific value and viscosity and has been used in power plants abroad,'' the official said.

The project is awaiting approvals, including environmental clearances. Details of the power purchase agreement are yet to be worked out, according to company officials.