Monnet Power MoU extension under govt consideration

The state government is considering a proposal to extend the validity period of the Memorandum of Understanding (MoU) signed with Monnet Power Company Ltd (MPCL) for a 1.050 Mw power plant at Angul.

“The extension of validity period of MoU of the proposed thermal power plant of your company is under active consideration of government,” the state energy department said in a reply to a MPCL query.

The MoU was signed on September 26, 2006 with a validity period of three years.

The company is almost through with the land acquisition work for the project which will be set up in the Malibrahmani-Nisha-Chendipada stretch of Angul district on 993.42 acres of land. The project is estimated to cost about Rs 5000 crore and the promoters have achieved financial closure for it.

Out of the total estimated expenditure, MPCL has arranged Rs 3,800 crore via loans from a consortium of lenders led by Infrastructure Development Finance Company (IDFC), while the rest is expected to be met by private equity investments. US-based private equity firm Blackstone Group has already picked up 12.5 per cent stake in MPCL for Rs 275 crore in 2010.

The company will set up two turbines at its coal-fired plants, each having 525 Mw. The first unit is expected to be functional by October this year, while the second unit may come around first half of 2013, the government sources said.

MPCL has to sell about 250 Mw power out of its total capacity to the state at a price to be determined by the Orissa Electricity Regulatory Commission (OERC) , as per the MoU conditions.

The company has already been allotted Mandakini coal block at Angul, jointly with Tata Power and Jindal Photo Ltd. The block has an estimated reserve of nearly 100 tonne coal.

For the proposed plant, MPCL will draw water from Rengali reservoir, said the norms mentioned in the expired MoU.