GMR Infra set to step on gas to fuel expansion in power sector

Eyes five fold capacity increase in gas-based generation

GMR Infrastructure, the Bangalore-based infrastructure developer with interests in power generation, highways and airports, is stepping on the gas to expand its flagship power generation business. GMR Power, the subsidiary of GMR Infrastructure, is understood to be looking to increase its gas-based generation by as much as 5 times.

GMR Power, which contributes nearly 50 per cent to the group’s revenues of Rs 4,500 crore, is understood to be eyeing to generate as much as 2,100 MW using gas as the fuel from three locations in Karnataka. GMR Power has one power generating station in Andhra Pradesh based on this fuel with a capacity to generate 388 MW and has also acquired a greenfield plant in Singapore to generate 800 MW.

Senior officials in the energy department of Karnataka government said that GMR Infrastructure has submitted Expression of Interest (EoI) for three gas-based plants with each having capacity to generate 700 MW. On an average, each station with 700 MW capacities will see an investment of Rs 2,400 crore and if GMR Power gets to generate at three locations, it will have to funnel in an investment of Rs 7,000 crore. GMR Infrastructure declined to comment on these plans and said they would not like to comment on what they termed as speculation.

The government of Karnataka is embarking on plans to set up gas-based power plants to generate close to 5000 MW of power in an effort to plug the supply demand deficit. Senior government officials in the Energy Department said they are scouting for land in Tumkur, Davangere and Gulbarga districts in state in addition to setting up a 2100 MW combined cycle power plant at Bidadi near Bangalore. The government officials further noted that there has been lot of interest from private players in these projects and a decision to award the bids will be finalized soon.

GMR Power has capacity to generate close to 900 MW with three stations and it is looking to increase its installed capacity to 10 times in the next six years. The company to fuel this expansion recently raised close to Rs 1,300 crore from a clutch of private equity investors – Temasek, IDFC, Argonaut and Ascent Capital.

GMR Power in addition to looking to generate close to 3,000 MW through the gas route, is aggressively pushing ahead to generate close to 5200 MW by using coal and 2200 MW through the hydel route.