Essar to invest Rs200b to raise power capacity
Thursday, 23 August 2007
NEW DELHI, Aug 22 (PTI): Corporate conglomerate Essar Group yesterday said it plans to invest more than Rs.200 billion over the next five years to scale up power generation capacity to 6,500 MW from about 1,200 MW at present.
"We already have five power plants with total capacity of 1,200 MW and are targeting to achieve a capacity of 6,500 MW over the next four-five years," Essar Power managing director A.K. Srivastava told PTI.
This would require an estimated investment of Rs.200 billion, to be funded in a debt-equity ratio of 75:25. This means, the group would have to invest about Rs.50 billion as equity and arrange nearly Rs.150 billion through borrowings.
Srivastava said funding would not be a constraint as the group had enough reserves to pump in the required equity and would also raise debt when required.
Giving details of the power projects, he said Essar Power (Jharkhand) Ltd, a part of Essar Power Holdings Ltd, was in the process of setting up a 1,200 MW coal-fired project near Ranchi in Jharkhand. The project has been allotted a captive coal mine with reserves of 100 million tonnes. In all, the project would require an investment of around Rs.50 billion, he said, adding financial closure is expected by March 2008.
Besides, Essar is setting up a 1,200 MW at Mahan in Madhya Pradesh and a similar capacity plant near Jamnagar in Gujarat, he said. While the Mahan project would be located adjacent to a coal-mine, the Gujarat plant would be run on imported coal.
"We are looking at Indonesia and South Africa for coal supplies and hope to finalise details within a couple of months," he added.
"We already have five power plants with total capacity of 1,200 MW and are targeting to achieve a capacity of 6,500 MW over the next four-five years," Essar Power managing director A.K. Srivastava told PTI.
This would require an estimated investment of Rs.200 billion, to be funded in a debt-equity ratio of 75:25. This means, the group would have to invest about Rs.50 billion as equity and arrange nearly Rs.150 billion through borrowings.
Srivastava said funding would not be a constraint as the group had enough reserves to pump in the required equity and would also raise debt when required.
Giving details of the power projects, he said Essar Power (Jharkhand) Ltd, a part of Essar Power Holdings Ltd, was in the process of setting up a 1,200 MW coal-fired project near Ranchi in Jharkhand. The project has been allotted a captive coal mine with reserves of 100 million tonnes. In all, the project would require an investment of around Rs.50 billion, he said, adding financial closure is expected by March 2008.
Besides, Essar is setting up a 1,200 MW at Mahan in Madhya Pradesh and a similar capacity plant near Jamnagar in Gujarat, he said. While the Mahan project would be located adjacent to a coal-mine, the Gujarat plant would be run on imported coal.
"We are looking at Indonesia and South Africa for coal supplies and hope to finalise details within a couple of months," he added.