G M R Group targets 3,300 MW generation in five years

The Rs 2,500 crore G M R Group, one of the fast growing infrastructure companies in the country, has outlined plans to generate 3,300 MW of power in five years time. The group currently generates nearly 800 MW of power from its three power plants in Karnataka, Andhra Pradesh and Tamil Nadu.

Speaking to Business Standard, G M R Group chairman G M Rao said: "There is severe shortage of power in the South of India and there is potential to tap this deficit. We plan to expand our power business in a major way and we intend to generate a total of 3,300 MW of power over a five year period."

The financing will be through a mix of debt and equity and according to Rao, financing is no longer a problem for the group. He said usually, the group adopts a 70:30 debt equity ratio for its power projects and highlighted the fact that India Development Fund recently invested Rs 100 crore in one of the group companies for expansion.

He further added that the generation capacities will be through both coal and gas and and coal-based projects "logically should be at the pit-head".

"We are scouting various centres including Uttaranchal and Orissa for power projects for generation and the supply will mostly be to the three states of Karnataka, Andhra Pradesh and Tamil Nadu," Rao noted.

Currently, the company generates 220 MW in Karnataka, another 200 MW in Chennai and is on its way to generating 370 MW at Vemagiri in the East Godavari District in Andhra Pradesh.

Commenting on the company's Tannir Bhavi Power Project in Karnataka, he said: "We have power purchase agreement (PPA) with the Karnataka Power Transmission Corporation Ltd for seven years and we have another four years further to go. At the end of this term, we are looking at ONGC gas pipeline to fuel the project and in case this does not fructify, we are planning to ship this barge-mounted power project to Andhra Coast and generate power there, where gas is already available there."

Commenting on the privatisation of transmission and distribution of power, he said: "We are pretty serious on this business and we will aggressively bid for the ensuing privatisation in Karnataka."