Dvc Weighs 1000mw Project Fund Options

The options include a possible Japanese loan, which will enable DVC to take up the Rs 3,800 crore project on its own, and joint venture proposals with an Indian or a Korean power company.

Although the joint venture option had initially generated enthusiasm, the current thinking is to pursue the Japanese loan.

The project, which has been hanging fire for several years, was to have been set up with Soviet assistance. But the disintegration of the erstwhile Soviet Union dashed hopes of securing a Soviet loan. Sanction of Japanese assistance depends on the preparation of a fresh detailed project report. It was Overseas Economic Cooperation Fund, the Japanese lending agency, that advised DVC to upgrade the size of the four generating units from 210 mw to 250 mw each. The OECF is also willing to lend money to prepare the project report.

 

However, OECF assistance is tied to preparation of a project report by an agency selected through global bidding. OECF lends up to 85 per cent of the project cost. The revised project size has to be okayed by the Central Electricity Authority. The techno-economic clearance has been considerably delayed with the CEA now insisting on clearance under section 29 of the Electricity Act even for government-owned power agencies like DVC. Section 29 requires the promoters of a power project to invite any public objection to the project. DVC had so far been exempted from this requirement. The forest and environment clearances are also in the pipeline. Even as DVC was trying to tie up the proposed OECF assistance, it received two proposals to float a joint venture. The first came from Bombay-based BSES Ltd and the second soon after from Korean Electric Power Corp.

The joint venture option would make it easier for DVC to mobilise funds for the project. It will have to make only a small equity contribution matching its shareholding in the joint venture. But the joint venture firm would have to be guaranteed a minimum offtake by DVC, which may force it to cut generation in other plants if the demand in the system is not high enough.

Besides, DVC officials do not favour the idea of part-ownership through a joint venture. It now has full ownership of four thermal power stations at Bokaro, Chandrapura, Durgapur and Mejia and three hydel power stations at Maithon, Panchet and Tilaiya. There is also a small gas turbine station at Maithon.