MCL begins hunt to select partner for 1,600 MW plant

Mahanadi Coalfields Ltd (MCL) which is foraying into power generation, has kicked off the process of selection of a strategic partner for its special purpose vehicle (SPV)- Mahanadi Basin Power Limited.

The SPV has been constituted for implementation of MCL's proposed 1,600 MW power plant, consisting of two supercritical units (2x800 MW) at an estimated cost of Rs 9,000 crore.

“MCL had recently held a meeting of the prospective bidders in Bhubaneswar where as many as 41 bidders turned up. The selection of the partner is underway,” said Kulamani Biswal, director (finance) of MCL. The partner will be selected through competitive bidding.

The coal company aims to use coal from Basundhara area in Sundergarh district, having reserve of 6.8 billion tonnes. The annual coal extraction from this mine is set to touch 40 million tonnes per annum in the coming years and presently, there is no railway infrastructure near the mine area to evacuate coal. The company said it has no hurdles in land acquisition for the 1,600 MW plant as it has enough non-coal bearing land for the power project. According to Biswal, the funding pattern for the power project will be 70 per cent debt with the residual 30 per cent being equity. The management control of the power plant will rest with the strategic partner. MCL may hold 26 per cent stake in the project but its share can go up to 49 per cent.

The company sees no hassle in power evacuation with the grid line of Grid Corporation of Orissa (Gridco) located close to the site.

Efforts are underway to get necessary clearances for water allocation, change in land use and others including the environmental clearance for the project so as to make it operational by 2015, said Biswal.