Satna Power to invest Rs 1,000 cr in 250 Mw plant

Satna Power Co Pvt Ltd has proposed to set up a 250 Mw power plant. The firm is promoted by KSK Energy Ventures Ltd.

Under the first phase, the company will set up two units of 125 Mw, and later it will set up three units of 77 Mw, all in Satna. "The investment will be Rs 1,000 crore to begin with," a senior government official told Business Standard.

According to sources, this will be the first project that will take come up on the basis of a short-term renewable power purchase agreement (PPA).

The company has reportedly signed a power purchase agreement with the Madhya Pradesh State Electricity Board and the state government may consider taking 11 per cent equity, with the balance remaining with KSK.

"The first phase of the plant will come up in 36 months from the date of the signing of the memorandum of understanding. The land acquisition for the project is in progress. It will be a coal-linked plant and coal supply will be from the Bramhapuri mines of Chhindwara. The power will be supplied at Rs 2.20 per unit," said a source.

The company has also sought support for obtaining coal from Chakha in Jharkhand or Chhattrasal in Madhya Pradesh.

Further, the company has sought no guarantee pertaining to losses on account of excess generation. The firm will develop mines within 36 months from the allocation.

"The MP government has recommended the case of the firm for the allocation of the Bramhapuri coal block," a government official in the industries department told Business Standard.

With power shortages crossing 2,000 Mw or a minimum of eight hours of power cuts, private power companies are eyeing the Madhya Pradesh market.

There is also the issue of who'd get credit for getting power investment, Chief Minister Shivraj Singh Chauhan or former chief minister and the current industry minister, Babulal Gaur.

Increasing power tariffs and poor maintenance have increased power transmission and distribution losses to 46 per cent. Only two power projects, namely the Omkareshwar power project of 520 Mw and the Birsinghpur thermal power project of 520 Mw, are coming up in the state by next year.