Sterlite plans to invest Rs 34K cr in power units

Coal-based plants in Orissa, Chattisgarh to generate 10,000 mw.

Mining and metals major Vedanta Group is planning to invest over $8.5 billion (about Rs 34,000 crore) to generate 10,000 mw of power through coal-based plants in Orissa and Chattisgarh.

Sterlite Industries, a part of the Vedanta Group, has recently incorporated a subsidiary, Sterlite Energy, for the power venture. Sterlite Energy will make an initial public offer (IPO) shortly to fund these projects, said Anil Agarwal, chairman of the $6.5 billion Vedanta Group. There would also be a pre-IPO placement, he said.

"The projects will be funded through 70:30 debt-equity. Our bankers are working out the details," Agarwal told Business Standard.

He said the company was planning only coal-based power projects, but depending on the availability of other fuels, the company would explore power plants fuelled by alternative energy sources.

Agarwal earlier addressed a news conference at which he announced Elements 2008, an exhibition and conference that brings together vendors, entrepreneuers and industry experts in the metals and mining sector.

Vedanta has been allotted coal mines with reserves of 320 million tonnes to ensure fuel availability for the power projects, the company's director Tarun Jain said. Vedanta Group has a cash surplus of over $4 billion (about Rs 16,000 crore).

Vedanta, already the largest power producer in the country after NTPC, plans to commission units for 4,400 mw of power in Orissa and 5,600 mw in Chattisgarh. The company produces about 2,800 mw for captive consumption for its mining and metal ventures.

The company is also setting up a 2,400 mw plant at Jharsuguda in Orissa which is expected to start commercial production in 2008-09.

About 15,000 people are working on the project. It is planned to increase capacity by about 2,000 mw in two years and commercial production of 9,600 mw by 2012. The power plants in Chattisgarh will come up at Korba.

Anil Agarwal said the company, also into iron ore mining, was exploring the option of foraying into steel production. "We are looking at suitable partners having technical knowledge in this segment for a joint venture", he said.

Vedanta, which is listed on the New York and London stock exchanges, is investing over Rs 50,000 crore in India in the power, mining and metal sectors.