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| GMR Infra plans Rs 2,500 crore Vemagiri Power expansion |
| Mahesh Kulkarni / Bangalore Jul 05, 2009, 00:35 IST |
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Vemagiri Power Generation Limited (VPGL), a subsidiary of Bangalore-based GMR Energy Limited, is planning to put up an additional capacity of 750 Mw in Vemagiri, adjacent to its existing natural gas-fired combined cycle power plant of 388.5 Mw.
The plant, located near Rajahmundry in the East Godavari district of Andhra Pradesh, is likely to see an investment of almost Rs 2,500 crore, a senior company official said.
“We propose to expand the capacity of Vemagiri power plant as plenty of natural gas is likely to be available in that region. We have already completed the formalities to get the environmental clearance and expecting it shortly. The detailed project report is ready. The gas required for the project will come from the existing distribution network,” Raaj Kumar, CEO-Energy, GMR Group said.
He said the company has already initiated talks with financial institutions to fund the project. Nearly 75 per cent of the fund required for the project will be met through the debt, while the balance will be in the form of equity from the parent company, he said.
GMR Group Chief Financial Officer, A Subbarao told Business Standard that despite the withdrawal of QIP issue last week, the company has sufficient funds to meet the equity requirements for the ongoing projects, including Vemagiri power expansion which will have an equity component of around Rs 600 crore to be infused over a period of three years. The company currently has cash close to Rs 2,000 crore, he said. VPGL has already floated tenders for installation of the complete 2x350-370 Mw gas-based Combined Cycle Power Plant on turnkey Engineering, Procurement and Construction (EPC) basis for the proposed project.
The existing 388.5 Mw Vemagiri power plant commenced commercial production in September 2006. In April this year, full gas became available and since then the plant is operating to its full capacity. Around 370 Mw of power is currently supplied to AP Transco under a long term power purchase agreement (PPA) at around Rs 3 a unit. Once the new capacity is added, the company proposes to sell around 50-60 per cent of power in the open market, while the remaining power will be sold through a long term PPA, which is yet to be signed. For the existing plant, the company has a long term gas supply agreement with Reliance Industries Limited and Niko from April 2009. RIL and Niko have agreed to supply natural gas from the Krishna Godavari Basin to fuel the Vemagiri plant.
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