India’s top sugar producer Bajaj Hindusthan will invest about Rs 15,000 crore in setting up power projects totalling 2,430 Mw in Uttar Pradesh.
The company will provide 90 per cent of the power generated to the UP power utility on fixed tariffs, while the rest could be traded in open market. Bajaj Hindusthan joint managing director Kushagra Nayan Bajaj and UP Power Corporation Limited (UPPCL) CMD Navneet Sehgal today signed MoUs in this regard.
While, the company would set up a 1,980 Mw (3X660) coal-fired power plant in Lalitpur district, 90 Mw units each would be installed at 5 sugar mills owned by the company, which total 450 Mw.
The Lalitpur project would entail acquisition of 1,500 acre land in Mirchwara village, about 60 km from the source of water at Rajghat Dam in Lalitpur.
“The funds for these projects would be arranged through internal accruals and debt. There is no plan to raise money from the capital market at present,” Bajaj told Business Standard on the sidelines.
The Lalitpur project, to be set up by a Bajaj-led consortium, would alone entail investment of Rs 10,000-12,000 crore, he informed. The state government would facilitate Bajaj in getting coal linkage approval from the Centre for the project.
“We hope the construction work on the Lalitpur project starts in the next 12-15 months and that it starts generation by 2015,” Bajaj said. Going forward, the company could hive off the power vertical into a separate entity.
Bajaj controls 16 sugar mills in UP and the (5X90) Mw units are likely to start generation by the end of fiscal 2011.
On April 20, the state cabinet meeting chaired by chief minister Mayawati had given its nod to these projects.
“Power sector entails large investment and since our Group has the financial capacity to invest, we decided to foray into the power sector. Besides, the country is already facing deficit in power generation capacity, including UP,” he noted.
“We target to attain power generation capacity of 25,000 Mw during the 12 th Plan,” Sehgal said.
