Iffco's Rs 7,500-cr power project in Chhattisgarh hits green hurdle

Indian Farmers Fertiliser Cooperative Ltd’s (Iffico) foray into the power sector has hit a roadblock. The Rs 7,500 crore mega power plant project has failed to obtain the necessary environmental and forest clearances as it falls under the ‘no-go’ zone according to the environment ministry.

The 1320 Mw coal-based power plant coming up at Salka village in the Sarguja district of Chhattisgarh falls under the government’s no-go area.

“The Iffico Chhattisgarh Power Ltd (ICPL) project did not get the necessary environmental and forest clearance. They (ministry of environment) told us it falls under no-go area. Even though a group of ministers is looking into the matter, we have given our proposal also to the ministry on how much of the area falls under forest lands and the number of trees to be cut,” said Managing Director U S Awasthi.

Iffco had decided to set up this pit-head coal-based thermal power project under the government’s Ultra Mega Power Project (UMPP). It has been financed with a debt-equity ratio of 70:30. “We have also told the environment ministry of the planned increase in the plantation and about our rehabilitation strategy. However, we do not plan to relocate the project anywhere else. In case we do not obtain the necessary approvals, we would have no other option but to shelve it,” Awasthi said.

This was Iffco’s first such initiative into the power sector in collaboration with the Chhattisgarh State Electricity Board (CSEB). Moreover, even locals have also been protesting the project. The commercial operation by ICPL, which was formed in 2006, is expected to commence in the 2012-13 financial year, chances of which looks bleak now.

The power plant will have its captive coal mine at Tara Coal Block from where coal would be brought to the plant through a conveyor. ICPL has also formed a joint venture entity called CMDC IPCL Coal Ltd with Chhattisgarh Mineral Development Corporation to develop the coal block.