Patel Engg may buy overseas coal mines

Mumbai-based engineering major, Patel Engineering, is looking at acquiring coal mines in Indonesia or Australia to support its thermal power plant due to come on stream in Gujarat.

The company is planning to set up a 1,200 mega watt (mw) thermal power plant near Bhavnagar, Gujarat at a proposed investment of Rs 5,000 crore.

The project will be undertaken under a special purpose vehicle (SPV) and funded through a mix of debt and equity. The electricity generated will be sold to power traders, captive consumers and state governments.

This will be the company's maiden foray into IPPs(independent power producers).

Rupen Patel, managing director, Patel Engineering, said, "Apart from sourcing coal from abroad, we are also looking at acquiring coal mines in Indonesia or Australia for which we are in talks with local companies".

The mines could cost between $2 million and $10 million and will have reserves to produce 4 million tonne (MT) of coal every year. According to Patel, "The Gujarat plant will be functional in the next 18 months and generate revenues of Rs 3,000 crore annually".

The engineering major is looking at setting up coal-fired plants in coastal states such as Karnataka and Tamil Nadu, with easier access to ports for quicker shipments of coal sourced from overseas. It intends to use the same model as the Gujarat project.

The company is also foraying into the IPP sector. It currently has 22 per cent market share in hydro electric generation and is considering bids of over 600 mw each from Himachal Pradesh, Uttarakhand and the north eastern states.

According to a report prepared by the Government of India (GOI), the government is aiming to add 50,000 mw of hydropower in the country by 2023 at a cost of $5 billion. About 60 per cent of all the power projects in India are funded by the central government.

According to Patel, "The Gujarat plant will be functional within the next 18 months and will generate revenues of Rs 3,000 crore annually".

Apart from this, the company is also looking at setting up similar coal-fired plants in coastal states like Karnataka and Tamil Nadu, where the plant will have easier access to ports for quicker shipments of coal which are sourced from overseas. The company intends to use the same module currently applied for the Gujarat project.

The company is also looking to foray into the IPP sector even in the hydro power generation segment. Currently, the company has a 22 per cent market share in hydro electric generation.

The company is currently considering bids of over 600 MW each of state-sponsored hydro power generation programme which includes state like Himachal Pradesh, Uttarakhand and the North Eastern states.

According to a report prepared by the Government of India (GOI), the government is aiming to add 50,000 MW of hydropower in the country by 2023 together at a cost of $5 billion. About 60 per cent of all the power project in India are funded by the Central Government.