Mumbai-based Nova Oleochem is planning to up a fully integrated bio-diesel project and three captive power plants in Gujarat at an investment of Rs 225 crore. The proposed capex will entail jetropha plantation in 10,000 hectares (ha) for which it has obtained in-principal approval from the state government.
The company proposes to produce 110,000 litre per day of bio-diesel and 7.5 mw of captive power of the three units of 2.5 mw each based on agri wastes. The bio-diesel plant is set to commence production in three years while power generation may begin within one year from the date of land acquisition. The company is all set to complete acquisition of land in 3-4 months on which plantation would begin by the end of the current financial year.
“Agri wastes is abundantly available in India which can be sourced for power plant while jetropha seed would be available only after three years from the normal four years as a local seed company has assured us to supply efficient seeds, capable of cutting timeline for fruits by one year,” said Ketan Karani, MD of the company.
The entry into jetropha plantation is significant as the company proposes to be utilising wasteland for the planned project and producing import substitute green fuel i.e. bio-diesel.
Furthermore, the plantation area is set to be extended to the hinterlands of the states in Rajasthan and Karnataka to the total proposed area of 100,000 ha in 3-4 years.
“We have not yet initiated talks with the respective state governments but have identified areas in which climatic condition is suitable for jetropha plantation. We would send the proposal to the governments of Rajasthan and Karnataka soon,” said Karani.
The proposed investment will be funded approximately 55 per cent through internal accruals while the second year onwards the company estimates to receive Rs 50 crore through carbon credit. Apparently, the company is looking for strategic partner to divest equity stakes through private placement. The company is also in talks with banks to part fund the plantation project.
