TNEB inks Rs 1,200-cr MoU with PFC to mitigate power shortage

In an initiative by the Tamil Nadu government to improve the efficiency of sugar mills in the state, the Tamil Nadu Electricity Board has signed a memorandum of understanding (MoU) with the Power Finance Corporation to set up co-generation projects.

Under the terms of the MoU, PFC has sanctioned TNEB about Rs 1,200 crore to generate around 250 MW of power out of co-operative and public sector sugar mills in the state, a PFC release said on Friday.

PFC will render its finance assistance to set up co-generation projects at about 17 co-operative and public sector sugar mills in Tamil Nadu. The MoU to this effect was signed between the two entities on March 31 in New Delhi.

TNEB has been allocated a budget of Rs 335 crore for 2008 by the Tamil Nadu government.

Stung by criticism from the industry over frequent power cuts, the Tamil Nadu government is moving to enhance power capacity in a big way. Work on TNEB's 600 MW unit in the North Chennai Thermal Power Plant at a cost of Rs 2,475 crore is presently underway and tenders have been invited for setting up a 600-MW power plant at Mettur thermal power station, said state finance minister K Anbazhagan in his budget speech last month.

In January this year, TNEB signed a memorandum of understanding (MoU) with Bharat Heavy Electricals Ltd (BHEL) for establishing a 1,600-MW power plant at Udangudi in Tirunelveli district. TNEB also plans to augment capacity at its thermal power station in Tuticorin by 1,000 MW.

Work has also started on establishing a 1,500 Mw power plant in north Chennai as a joint venture between TNEB and the National Thermal Power Corporation.

In the coming financial year, power transmission and distribution infrastructure in the state is proposed to be augmented at an investment of Rs 1,720 crore by setting up 90 new electrical sub-stations.