Neyveli Lignite ties up Rs 7,000 cr to fund expansion plans

State-run lignite-based power producer Neyveli Lignite Corporation has tied up Rs 7,000 crore of funds to finance its expansion plans.

The company, which currently generates 2,490 MW of power annually, plans to augment this capacity to about 4,300 MW by the year 2012. Part of the debt is likely to be funded by a consortium of banks, led by Bank of Baroda, and financial institutions like Rural Electrification Corporation.

"We plan to add 1,800 MW in the next two years and have tied up about Rs 7,000 crore of debt, part of which would utilised towards this building capacity," Neyveli Lignite Corp Director (Finance) K Sekar said.

He said, "We have ambitious plans to expand the capacity, we have funds of about Rs 5,000 crore with us and the rest would come through debt."

The company's projects under execution include a 1,000-MW power project in Tuticorin (Tamil Nadu), 500-MW extension of the Neyveli project, a 50-MW wind power project and the 250-MW Barsingsar project in Rajasthan.

The company commissioned the first 125-MW unit of the 2x125 MW Barsingsar project in the state on June 5. It is likely to execute two more power projects of 250 MW each in the state.

Neyveli Lignite Corp registered a profit after tax of Rs 1,604.86 crore for the fiscal ended March 31, 2010, compared to Rs 1,046.01 crore in the previous year.