Tata Power, DVC sign deal for 1,000 MW unit

Tata Power Company has signed the shareholders' agreement and the share purchase agreement with Damodar Valley Corporation (DVC) for the proposed, 1,000 MW thermal power project being developed by Maithon Power.

According to a release issued by Tata Power to the BSE today, the company will hold 74 % equity in the proposed venture, and DVC will hold the remaining 26% equity.

"The estimated capital cost of the project is around Rs 3,800 crore, and will be funded through a 70:30 debt-equity ratio. The company will contribute around Rs 840 crore to the equity corpus, and DVC will bring in about Rs 300 crore," the release added.

DVC has already acquired a significant portion of the required land for the project. The financial closure is targeted around June 2006, the release added.

"As per current plans, the project will comprise of two generating units. While the commissioning of the first unit is scheduled for September 2009, the second unit commissioning would be completed by March 2010," the release said.

Adi Engineer, MD of Tata Power, said: "This joint initiative marks our first foray into a generation pact with the government. It may be recalled that our successful joint ventures have been with NDPL in distribution and the 400 kV Bhutan to Delhi (Tala) transmission project in the transmission sector."