CESC ventures into hydel sector

CESC Ltd, an RPG Enterprises company, has diversified into hydroelectric power generation and is setting up a 90-megawatt (Mw) unit in West Siang district of Arunachal Pradesh at an investment of Rs 630 crore. The project is expected to be commissioned by 2015-16.

CESC Vice-Chairman Sanjiv Goenka said, “We have signed a memorandum of understanding with the Arunachal Pradesh government for setting up our first hydropower project. The total investment for the project will be around Rs 630 crore, at an estimated cost of Rs 7 crore per Mw.”

Around 70 per cent of the funds for the project will be raised via debt and the rest through internal accruals. However, the group has not decided whether the project will be under CESC or one of its subsidiaries.

In January, the company had announced that it would start a 140-Mw hydro project at Lara-Sumta in Himachal Pradesh, but the project is yet to make any significant headway.

“CESC expects financial closure for the Arunachal project in next 12-15 months, as the environment clearance will take some time. The process has already started,” he said.

CESC will give 12 per cent of the power generated to the state government, while the rest will be sold in merchant market. It will also construct a diversion barrage across river Siyom near Jarong village, so that there will be no scarcity of water for the project through out the year.

“In terms of hydroelectric power, the company is looking at other areas in North-East and other Northern states of the country. North-East has about 59,000 Mw and Arunachal Pradesh has 15,000 Mw of hydel power potential. Moreover, our present project is a run-of-river project and hence, the environmental effects will be reduced,” he added.

The company also plans to invest Rs 35,000 crore for achieving the target of generating 7,200 Mw in next six years. “In next six years, CESC has set a road map to produce 6,500 Mw of thermal, 500 Mw of hydel and 200 Mw of solar power. We are planning to invest Rs 35,000 crore to achieve this target,” Goenka said.