Monnet Ispat to set up 600Mw plant in Orissa

Monnet Ispat and Energy Ltd has firmed up plans to set up a 600 MW pithead coal-based power plant in Orissa. The company wants to set up two units of 300 Mw each at a total investment of Rs 2,400 crore.

The plant will source coal from the Utkal B2 captive coal block in the Talcher coalfields that was recently awarded to the company.

It plans to start work on the plant by July this year and expects the first 300 Mw unit to be commissioned by 2008, at an investment of Rs 1,200 crore. "The project will have a debt-to-equity ratio of 70 to 30," a top company official told Business Standard.

The company has got possession of 350 acres of land and is scouting for an additional 100 acres. After phase one of the project, the company plans to raise Rs 360 crore as equity for the next phase by floating an IPO.

The first year generation cost per unit will be around 80 paise. Over a period of ten years, the generation cost per unit will be as low as 35 paise. Transportation costs would be low as the plant would be just four km away from the mine, an official said.

The company is in discussions with Power Trading Corporation, Adani Exports and the Orissa State Electricity Board to sell power and plans to price it at around Rs 2.20 per unit.

Monnet Ispat and Energy Ltd posted a turnover of Rs 520 crore in 2004-05 and expects to post a turnover of Rs 650 crore for 2005-06. The company's net profit for the last fiscal is expected to be around Rs 123 crore.