PFC may rope in PowerGrid for four ultra mega projects

PowerGrid lines up Rs 5,100 crore capex for this fiscal.

Power Finance Corporation has approached Power Grid Corporation to set up transmission projects for evacuating close to 16,000 Mw of power from the four proposed ultra mega power projects.

A top Power Grid official told Business Standard that the company had lined up a capital expenditure of Rs 5,100 crore this fiscal and that its fibre optic network business would break even by 2007-08.

It plans to raise 70 per cent as debt and the rest as equity. The debt will be raised through bonds and long-term and multi-lateral loans.

Power Grid is buoyant about its fibre optic network business. It posted a turnover of Rs 50 crore last fiscal and is expected to clock a turnover of around Rs 75 crore this fiscal.

Talking about its role in the ultra mega power projects, the official said, "We have been approached by PFC for setting up transmission projects for Sasan (Madhya Pradesh), Mundra (Gujarat), Tadri (Karnataka) and Girye (Maharashtra)."

Power Grid will need an indemnification agreement with the project developer before setting up the project. "We will also need a comfort letter from state electricity boards before we go ahead with the tie-up," the official added.

Tentative allocations of power from the ultra mega power projects of 4,000 Mw each at Sasan, Mundra, Tadri and Ratnagiri have been drawn up. Out of a total demand of 27,400 Mw made by 13 states, the power ministry has firmed up allocation of 16,000 Mw.