Jindal Tractebel Power Company (JTPCL), part of the Rs 4,900-crore Jindal Vijayanagar Steel, has identified Indal and a couple of other companies, for sale of surplus power.
The Rs 1,180-crore JTPCL, which is in the process of setting up an additional 130mw to its existing 130mw plant in Bellary, Karnataka, is understood to have entered into a contract with the Calcutta-based Indal to supply between 60mw and 100mw for its power-strapped smelter plant at Belgaum.
The power company, based on the Corex technology, is a joint venture between the Belgium-based Tracetebel Power Co and the Jindals with each having a 50 per cent stake.
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According to a senior JTPCL official, even at peak capacity, the Jindal steel project would not require more than 100mw and hence the excess power could be sold to private companies. The state government has already agreed for such an arrangement.
The 1.6-mtpa integrated steel project, which has been delayed because of cost overruns, recently received a fresh lease of life with the promoters managing to mop up most of the required funds (Rs 830 crore).
The initial cost of the steel project, which was Rs 4,138 crore, shot up to Rs 4,968 crore following cost overruns. The promoters, the O P Jindal group, holds 38 per cent stake, while the rest is held by financial institutions and the public.
A leading financial institution commissioned by the promoters had suggested that an additional Rs 830 crore was required to complete the entire project.
The cost overrun has been attributed to the delay in project clearances leading to a lag in the commissioning and the exchange rate fluctuations.
The rise in costs is being funded through a mix of debt and equity. While the promoters have pumped in Rs 150 crore, the rest is through debt.