Khandwa power project in MP hits rough weather

Narmada Hydroelectric Development Corporation’s (NHDC) much awaited subsidiary-promoted 1360 mega watt (Mw) Khandwa thermal power project is facing trouble as the central government has not cleared coal linkage for the project yet.

Although state-owned NHDC, a joint venture of National Hydro Power Corporation (NHPC) and the state government, has completed the private and government land acquisition process in Rewanagar of Khandwa district, the detailed project report is still in the pipeline and financial closure for the project is yet to be obtained.

Both, state government and NHPC have picked equity in the project to a maximum of 30 per cent. NHDC is likely to exhaust its internal funds in the project, which would be based on super critical technology. “The rest of the funding will come from debt instrument,” ABL Shrivastava, Chairman of NHPC told Business Standard adding, “Section-4, Section-6 and Section-9 notices have been given to farmers of the area and award will soon be passed but we are waiting for the coal linkage. We hope that the next meeting of the central ministers will clear the linkage.”

He, however, said, cost escalation and higher power tariff cannot be ruled out.

The project, which will be a Rs 6,500 crore venture, is likely to be completed before 2017, during the 12th Five Year Plan.

“The site allocated by the state government was not economically viable, we have floated fresh expression of interests and received a good response,” Shrivastava added.

The land acquisition for Khandwa thermal power project is a tough task for the state government as farmers are very demanding. A power purchase agreement has already been signed between NHDC and MP Power Trading Company.

Meanwhile, NHDC in its board meet, cleared Rs 35 crore dividend to its shareholders after posting a net profit of Rs 304 crore .The total sales surged to Rs 1,025 crore after posting 3,196 million units.

NHDC has completed two hydro power projects, namely Indira Sagar and Omkareshwar in the state but dropped 100 Mw wind power in Kukru village of Betul district and also three mini hydel power projects of a combined capacity of 120 Mw.