Cerc To Introduce Stiff Penalties In Grid Code

The Nagarjuna Group, promoters of the 1,015 mw Nagarjuna power project, are expected to limit their equity in the project between 37 per cent and 51 per cent.

According to sources in the group, the promoters are also negotiating with operation and maintenance contractors for picking up a stake in the project. They are also negotiating with Hong Kong-based Fire Seeds Company, for picking up a stake in the Rs 4,000 crore project.

The promoters have already signed the power purchase agreement (PPA) with the Karnataka Power Transmission Corporation Ltd (KPTC) and have received the techo-economic clearance for it. The promoters will now go in for financial closure. The debt-equity ratio for the project is 70:30.

 

Once the deal is firmed up, the promoters plan to send a detailed note on the equity partner's background to the Karnataka government's energy department.

In another development, Alstom, the engineering procurement and construction (EPC) contractor for the project, has indicated to the promoters that at present, it has no plans to pick up a stake in the project.

The Karnataka Industrial Area Development Board (KIADB) has already started proceedings for acquiring around 1,300 acres of land for the project.

Among the power projects (based on memoranda of understanding) in Karnataka, which are over 1,000 mw, the Cogentrix-promoted Mangalore project and the Nagarjuna project are the only two that have progressed to the stage of PPA. Cogentrix has already signed the PPA with the Karnataka Electricity Board, which may come up for renegotiations once the Supreme Court gives its verdict in the case.

The 1,000 mw Chamalapur power project, promoted by Mysore Powergen Pvt Ltd, has not made much headway. It has not been able to receive clearance to draw water from the Cauvery river, following the river water dispute among Karnataka, Tamil Nadu and Kerala.

The 1,107 mw Almatti power project, promoted by Chamundi Power Corporation Ltd, is also embroiled in a controversy because of a river water dispute between Karnataka and Andhra Pradesh. The case is pending in the Supreme Court.

In Karnataka, 73 per cent of the power generated is hydel and the rest thermal. At present, the Karnataka Power Corporation Ltd, the power generating arm of the state government, produces 74 per cent of the 4,431 mw consumed by the state.