OP Jindal in 1000 MW Chattisgarh project

Jindal Steel & Power board okays Rs 3,900 crore power plant

Jindal Steel & Power Ltd, an O P Jindal group company, is setting up a 1,000 MW power plant at Raigarh in Chattisgarh for Rs 3,900 crore.

The company's board of directors, at its meeting held here on Wednesday, has given its approval to set up the 500 mw capacity in the first phase of the project.

The project cost of the first phase is expected to be around Rs 2,140 crore, funded in seven parts by debt and three by equity.

The entire equity of Rs 642 crore will be brought in by Jindal Steel & Power, though some other group investment companies might take a small stake later. The project is being implemented under Jindal Power Ltd, a subsidiary of Jindal Steel & Power.

"The project has been recognised as a mega power project by the government," Jindal Steel & Power executive vice-chairman and managing director Naveen Jindal said at a press conference here today.

"This would result in import duty and excise benefits for the project. We hope to save at least 10 per cent on the project cost."

According to Jindal, the power project is located just 10 km away from the coal mines allocated to the company. "All told, we should have a seven-eight per cent advantage in our tariff. We will be able to supply power at less than Rs 2 per unit," Jindal added.

Jindal said that he hopes to attain financial closure of the project by April-May this year and the power plant is expected to be commissioned by March 2007. SBI Capital Markets Ltd is the financial advisor for the venture.

He also indicated that the second phase of the project, which would take the total power generation capacity to 1,000 MW, too will be taken up shortly. He hopes to do the financial closure of the second phase by the end of the year.

Talking about the sale of the power generated, Jindal said about 500 mw will be used by Jindal Steel & Power Ltd and the 100-acre industrial estate the company is setting up in Raigarh, another 300 MW will be sold to state electricity boards and the company will trade the remaining 200 MW.