Power Finance to fund 1,000 Mw power in UP

The Power Finance Corporation of India has agreed to fund the expansion project of the Pariccha and Harduaganj thermal power stations located in Jhansi and Aligarh, thus adding a fresh capacity of 1,000 Mw in power-starved UP.

The PFC has communicated its consent to the UP Thermal Power Generation Corporation to fund the expansion project of Rs 2,660 crore. The remaining cost will be met from budgetary support by the UP government.

The expansion plan includes 2x250 Mw units at Pariccha and 2x250 Mw units at Harduaganj, thus adding a total capacity of 1,000 Mw. Both units will be coal-based. The expansion plan also includes setting up 3x110 gas-based thermal units at Panki in Kanpur, at the cost of Rs 1,000 crore, thus adding a total capacity of 1,330 Mw.

Further progress has been held up in Panki due to lack of gas linkages from the HBJ pipeline of GAIL for the proposed project. The process of tendering the contract to BHEL for the supply of a boiler, turbine, generator, and other works is likely to be completed in a few months, and work is likely to commence this year. The expansion project is targeted to be completed by 2008-09.

"The PFC will fund nearly 70 per cent of the project cost, and the rest will be provided by the state government through budgetary support," said Ashok Khurana, principal secretary (energy). He said for 2006-07, a provision of Rs 400 crore was likely to be made from the state Budget.

The borrowing from the PFC will be against the assets of the power-generating utility. The UP government had in December last year approved a plan to add 1,330 Mw of additional capacity in the next three years, with an estimated investment of over Rs 5,000 crore.

The government has also approved a plan to invest Rs 1,000 crore to strengthen the transmission network for wheeling the required amount of power. The power generation utility considered several options prior to the commissioning of the new units.

The first option was to award the project to BHEL on a turn-key basis; the second to invite international competitive bidding (ICB); and the third to divide work between BHEL and other central and state PSUs. The power utility has settled for the first option because this route will take only 3-4 months.

The construction of new units at the site of existing plants has become imperative for the government grappling with power crisis for over a decade.

The new units will incur no additional cost from land or infrastructure, which are already available.

The existing units had already long outlived their lifespan and in any way were to close down in next few years. At Paricha, there were two units of 110 Mw capacity in operation, both over twenty one years old.

There were seven existing units at Harduaganj of capacity ranging between 50 Mw and 110 Mw, which were over three decades old, of which only three were in operation, and the remaining closed. At Panki, two units of 32 Mw each were closed for over a decade, while two 30-year-old units of 110 MW capacity each were operating at derated capacity.