Essar Energy to acquire Navabharat Power

The UK-based Essar Energy plc today said its subsidiary Essar Power Ltd (EPL) has entered into binding agreements for the acquisition of a 100 per cent interest in Navabharat Power Pvt Ltd.

EPL will initially acquire 76 per cent of the existing equity with the balance 24 per cent being acquired upon completion of certain project milestones, a company statement said here.

Navabharat Power is a 2,250 MW coal-fuelled power plant being set up in Dhenkanal district in Orissa. The project is being implemented in two phases -- the first phase of 1,050 MW and phase two of 1,200 MW at a total estimated capital cost of $2 billion.

The project includes the allocation of the Rampia Coal block of 112 million tonnes and a 4.7 million tonnes per annum tapering coal linkage with Coal India Ltd.

Phase I of the project already has in place a number of approvals, including environment clearances. All other approvals are being progressed, including land acquisition. Phase I is expected to achieve financial closure by end of CY 2010.

The advance stage of the approval process is expected to save about two-years of execution time compared to a greenfield investment, the release said.