AES, Odisha invest additional Rs 485 crore in OPGC equity

Odisha Power Generation Corporation (OPGC), a 51:49 joint-venture between the Odisha government and the US-based AES, has expanded its equity base by Rs 485 crore with proportionate additional capital infusion by both the shareholders.

The equity infusion was required to support the investment for capacity expansion of the company's thermal power station, which is underway.

OPGC runs a 420 Mw coal-based thermal power plant at Ib Valley in the Jharsuguda district and is in the process of expanding the capacity by 1320 Mw (2X660 Mw). The funding of the expansion project, along with development of captive coal mines, is estimated to cost Rs 11,547 crore and is based on a debt to equity ratio of 75:25.

While the Odisha government has released Rs 247.35 crore in favour of OPGC as equity contribution, AES has brought in additional $35.39 million (Rs 237.65 crore) proportionate to its 49 per cent stake in the company, thus raising the paid up equity capital of OPGC to about Rs 975 crore from the existing equity base of Rs 490 crore.

This infusion has come as part of the equity requirement for financial year 2016-17, as agreed to by both of the shareholders in line with the schedule of drawal envisaged in the financing agreements entered with the Power Finance Corporation and Rural Electrification Corporation.

The state government and AES are required to bring together further equity of about Rs 1,156 crore in the financial year 2017-18, out of which AES' share of Rs 584 crore is expected to come in as foreign direct investment.

Apart from financing, the Odisha government has extended support to the expansion work in terms of obtaining permits, licences, fuel security arrangement and land acquisitions etc. In February of 2014, Chief Minister Naveen Patnaik had flagged off the construction of two new super critical units of 660 Mw each at the power plant and these are expected to go into commercial operation in 2018.