Reliance Energy to bid for UP project

Reliance Energy will participate in the international bidding process for the proposed 1,000 megawatt Anpara C project in Uttar Pradesh.

The board of the company also approved an investment of Rs 1,500 crore for the project, with a debt-equity ratio of 70:30.

The thermal Anpara C project, located around 190 km from Varanasi, is a pit-based project that will be set up on a build, own, operate and maintain basis.

The project will be set up along with the existing 3x210 mw Anpara 'A' and 2x500 mw Anpara 'B' sites. The total generation capacity at the Anpara site will be about 2,630 mw.

The proposed investment comes close on the heels of the company's decision to participate in the divestment of the Uttar Pradesh government's majority stake in the five distribution companies in the state. The power produced at Anpara will be sold to distribution companies by way of a long-term power purchase agreement.

The recent announcements indicate that Reliance Energy wants to be a major player in the entire value chain of energy in Uttar Pradesh. REL has also proposed the setting up of a 3,600 mw power plant at Dadri.

Sources close to the development said, "Though the Reliance Energy plant has got clearance from the ministry of environment, the financial closure is expected to happen by January-end."

They point out that Reliance Energy had fixed an internal deadline of November 30 for financial closure. It had approached banks and the financial institutions for debt of Rs 9,000 crore for the 3,500 MW power plant at Dadri in Uttar Pradesh.

The company wanted to finance the project with a 90 per cent debt component and 10 per cent equity as against the industry norm of a 70:30 debt-equity ratio. "However, nothing has been finalised. Negotiations are still on," the source added.

Meanwhile, the Anpara project is likely to be structured in a manner that makes it eligible for fiscal benefits under the government of India's mega power project policy.

Bids for private sector participation in the Rs 4,000 crore Anpara project were invited by the state-owned Uttar Pradesh Rajya Vidyut Nigam Limited (UPRVUNL).

This invited bids on behalf of the Uttar Pradesh Power Corporation Limited (UPPCL), the state-own transmission company, which also currently owns the distribution business in Uttar Pradesh.

"The availability of coal and water sources at a short distance from the proposed site is an added advantage. This, together with mega project status, is likely to have a substantial beneficial impact on the power tariff", A REL press release added.