KSK Energy Ventures Limited, a Hyderabad-based power project development company, has received consent from the Chhattisgarh government to enhance the power generation capacity of the Wardha Chhattisgarh power plant at Nariyara to 3,600Mw.
A requisite implementation agreement is expected to be signed shortly.
“The company expects that the entire 3,600Mw execution would involve an outlay of approximately Rs 16,200 crore to be funded 75:25 by debt and equity respectively. With the availability of IPO proceeds raised in June 2008 to pay the initial EPC (engineering, procurement and construction) mobilisation advances, the company would seek to raise further equity in the coming months. However, the requirement of additional equity is expected to be marginal since the company plans to fund a major portion from additional internal accruals and other sources,” KSK Energy said in a release on Tuesday.
KSK has awarded the turnkey 3,600Mw capacity expansion contract to Sepco Electric Power Construction Corporation, an EPC contractor from China engaged in power plant design and construction. Sepco has committed to a unit-wise commissioning of 600 Mw each of the project, the release added.
KSK is currently involved in setting up a 1,800Mw power plant based on the coal supplies from Morga-II block by the Goa Industrial Development Corporation.
On the Wardha Warora, a 540Mw power project in Maharashtra, the company said it had entered into a short-term power purchase agreement – with differential tariffs during monsoon and non-monsoon periods – in May 2009 with the Maharashtra State Electricity Distribution Company Limited for supply of power in gradually increasing quantities between November 2009 and October 2010.
“We expect the total installed capacity under the company to be 862 Mw by March 2010. With the short-term power sales by Wardha Warora project, we anticipate significant cash flows and internal accruals will commence for further equity commitments,” said KSK’s non-executive chairman TL Sankar.
KSK Energy’s scrip rose 2.61 per cent to end the trade at Rs 214 on the BSE on Tuesday.