CESC plans two 250mw power plants in Bengal

Power utility and RPG group company, CESC Ltd is looking at the possibility of setting up two 250 MW power plants at Budge at Rs 2,000 crore.

It has already received the clearance for the first 250 MW plant from the West Bengal pollution control board. The clearance from the Ministry of Environment is expected in another few week and the project is likely to be commissioned by December this year. The total project is expected to be complete in three year.

"The second 250 MW plant however would be based on demand and we are yet to file papers for it," explained Sanjeev Goenka, vice-chairman, at a press conference after the 26th annual general meeting of the company.

While the first phase would be completed through a mix of debt and internal accruals, the second phase is likely to be a combination of debt, equity and internal accruals.

CESC has also firmed up plans of raising around Rs 725 crore of loans for swapping its high cost debts "" both long-term and working capital with cheaper ones as part of its second round of restructuring effort. The company is also talking to two other similar entities for procuring additional loans for swapping its costly debt.

CESC has procured the loan from three sources "" Power Finance Corporation (PFC), Housing & Urban Development Corporation Ltd (Hudco) and through the issue of commercial paper.

The loans from Hudco and PFC would be at around 9 per cent, while the commercial paper would be at 5.25 per cent. Srei International Finance Ltd has been given the mandate of raising the amount.

In a bid to bring down costs the company has also started pre-paying a portion of its debt. It made a pre-payment of Rs 390 crore last year, while this year it hopes to make another Rs 400 crore.