Tata Power, DVC ink Maithon joint venture

Tata Power Company has signed a joint venture (JV) agreement with state-owned Damodar Valley Corporation (DVC) for the proposed Rs 3,800 crore mega power plant of 1,000 MW Right Bank Thermal Power project developed by Maithon Power Ltd.

Tata Power will hold 74 per cent equity in the venture and will infuse Rs 840 crore to the equity corpus, while DVC will chip in Rs 300 crore with 26 per cent stake, the company informed the Bombay Stock Exchange (BSE) here today.

The project will be funded through a 70:30 debt-to-equity ratio and the financial closure is targeted by June 2006, it said.

Meanwhile, DVC has already acquired a significant portion of the required land for the project.

As per current plans, the project will comprise two generating units, the first unit of which is scheduled to be commissioned by September 2009 and the second by March 2010.

"We believe that joint cooperation with the government is essential in meeting the targeted demand for power in the country. This joint initiative marks our first foray into a generation pact with the government. It may be recalled that we have had successful JVs with North Delhi Power Ltd in distribution and the 400 kV Bhutan to Delhi (Tala) transmission project in transmission sector," Adi Engineer of Tata Power said.