Udupi Power to invest Rs 6,930 cr in second plant

Udupi Power Corporation Limited (UPCL), a subsidiary of Lanco Infratech Ltd, an infrastructure company, is planning to expand capacity of its thermal power plant by setting up two more units of 660 Mw each at an estimated investment of Rs6,930 crore at Nandikur in Udupi district in coastal Karnataka, a senior company official said.

“We recently signed a memorandum of understanding with the state government for the project. The state has agreed to provide 600 acres adjacent to our existing power plant. Once the land is transferred we will set up the plant in three years,” Kishore Alva, vice president-corporate affairs, UPCL said.

The funds required for expansion will be raised from a consortium of public sector banks. Presently, the company has executed its first plant in the debt-equity ratio of 72 : 28 per cent. The cost of the first two units of 600 Mw each has cost the company Rs5,689 crore. The debt is raised from a consortium of 14 banks led by Power Finance Corporation, Alva told Business Standard.

Presently, UPCL is in the process of commissioning its second unit of 600 Mw, which will be synchronised by October-end this year. The first unit has already started generating 600 Mw from June this year. As per the power purchase agreement signed with the state government, UPCL will supply 90 per cent of the generated power to five Escoms in Karnataka for 25 years. The balance 10 per cent will be supplied to Punjab.

UPCL is the first independent power producer in the country to use 100 per cent imported coal. The company imports almost one ship load of 70,000 tonnes every week. It requires 12,000 tonnes per day to fire a 1,000 Mw power plant, Alva said, adding they have set up a dedicated jetty at the New Mangalore Port for coal imports.

UPCL will use wet limestone-based Flue Gas Desulfurisation (FGD) technology for removing sulphur dioxide (SO2) from the exhaust upto 99.9 per cent. This is being done considering the eco-sensitive area surrounding the plant, which is located close to the western ghats, Alva added.

The plant will also use sea water for cooling purposes and it is desalinated to meet the process and potable water requirements of the project.

“We are presently waiting for the establishment of a 400 Kva line by the Karnataka Power Transmission Corporation Ltd (KPTCL) to evacuate power from our plant. Once it is ready, we can evacuate 1,200 Mw power daily,” Alva said.

Presently, Lanco Infratech is operating 2,087 Mw of power plants and another 7,238 Mw is under construction. Its order book of EPC and construction stands at Rs25,700 crore. For 2009-10, Lanco reported a gross turnover of Rs9,457 crore and a profit of Rs458 crore.