Essar Power to set up 1,200 MW plant in Gujarat for Rs 4,800cr

New Delhi, Aug 28 (UNI) Essar Power (Gujarat) Ltd (EPGL), a subsidiary of Essar Power Holdings Ltd today said, it will set up a 1,200 MW power plant in Gujarat with an investment of Rs 4,800 crore.

EPGL has bagged this project against several competitive bids invited by the Government of Gujarat and has drawn up plans to increase generation capacity to 6,500 MW from 1,200 MW at present by 2012, which will entail an investment of Rs 20,000 crore, company said in a statement.

The plant will use high quality imported coal as fuel.

The company expects financing to be in the ratio of debt/equity of 3:1 and the financial closure is expected to be achieved before the end of the year.

It has also entered into a 25 year power purchase agreement with the Gujarat Government for supplying 1,000 MW of power at a levellised tariff of Rs 2.40 per unit. The company is free to sell the balance power, the statement said.

As per the agreement, the project should be completed within four years from the date of awarding which was February, 2007.

EPGL has identified around 700 acres of land near Khambalia in Jamnagar district for executing the project.

It will create its own captive infrastructure to receive imported coal by setting up a port and other related facilities.

It is learnt that the company is in discussions with various equipment suppliers and orders for equipment supplies are expected to be finalised in the next two months.

The range of power projects executed by Essar includes gas-based, multi-fuel, co-generation and coal-based power plants.

Essar Power was the first independent power producer in the country, when power sector was liberalised.

UNI