Kribhco plans Rs 4,000 cr power project in Bihar

The 1,000 mw plant will be set up in association with BSEB.

Gujarat-based fertiliser cooperative major Krishak Bharati Co-operative (Kribhco) plans to set up a 1,000 mw joint venture project in Bihar in association with the Bihar State Electricity Board (BSEB), at an investment of Rs 4,000 crore.

This is the company's second such project and confirms its diversification into power generation and trading activity. Kribhco's first power JV, a 1,000 mw project in association with the Chhattisgarh State Electricity Board (CSEB), is on track. As in the case of the Chhattisgarh project, Kribhco will hold 51 per cent in the second project also.

Along with Iffco, Kribhco is one of the country's major profit-making fertiliser manufacturer. "All that I can say is that we are making efforts to move into power trading as part of our diversification plans. While the Chhattisgarh plans are on track, the Bihar effort is still at a nebulous stage. We have shown interest and the Bihar government is ready to support us," Kribhco Managing Director B D Sinha said.

Around 1,000 acres will be required for setting up the power plant. Kribhco is also moving into other businesses such as setting up a jetty at its Hazira power plant and has entered into a tie-up with the Railways for container services.

Sinha said, "These are part of our future expansion and diversification programmes across the country."

The projected will be funded mainly through loans from banks and financial institutions. Formation of a special purpose vehicle could also be on the cards for the Bihar venture. Kribhco authorities have also initiated dialogues with Power Trading Corporation for their foray into power selling.

Kribhco gave its presentation for the project to the Bihar government on Monday. Kribhco Chairman Chanderpal Singh Yadav said, "It all depends on how the Bihar government helps us in setting up the plant, now that we have decided to go in for a second power venture. The Bihar cabinet will decide on our proposal."

Kribhco plans to set up the Chhattisgarh power plant by the end of 11th Plan. As for the Bihar venture, it is yet to fix any date.

Discussions held between Kribhco and the Bihar government on March 17 in Patna were mostly focused on sourcing raw materials for the power project.

The state government plans to use some of its coal mines, which are now within the jurisdiction of the Jharkhand government to source coal.

According to Sinha, "The Bihar government is yet to decide about the transportation of coal from the mines currently lying in Jharkhand. But they are genuinely trying to work out some plans."

While a part of the output would go to Bihar, to be wheeled out through grid to be sold to other states, as in the case of the Chhattisgarh project, said Sinha.