Enron 10000mw Proposal Finds Favour With Govt

Enron's proposal to create 10,000 mw of power in India by the year 2001 at an investment of $10 billion has met with favourable response from the Union government.

The US major has proposed to provide 10,000 mw of power at 4.9 per cent per KW hour.

Confirming the news over a telephonic chat with Business Standard from New Delhi, the Union power secretary P Abraham disclosed that acceptance of the proposal has been verbally communicated to Enron.

However, there has been no written communication to this effect, he added.

Abraham stated the Centre has to first seek approval of the states in which the power plants are likely to be set up, before giving the green signal to Enron. Secondly, no techno-economic clearance is required from the Central Electricity Authority (CEA) for projects up to an investment of Rs 1,000 crore," he said.

 

The Enron proposal entails setting up of liquefied natural gas (LNG) terminals and creation of liquid fuel-based generation capacities in India.

Around 5-7 LNG terminals is estimated to fuel the power units for generating 10,000 mw power. The advantages of using LNG as a fuel for power generation is that it is clean as well as cheap, besides being environment friendly.

"Since, the liquefied natural gas terminals by their very nature can be set up only in the coastal areas, the power plants too will come up near them," Abraham pointed out.

The proposed power plants are likely to range of 1000-2000 mw in capacity and are to be set up in Northern India as well as along the coastline in the southern states.

Enron, in a letter to the former Prime Minister Deve Gowda, had sought the government approval to help put up LNG terminals.

A 50:50 equity structure has been proposed by Enron for the project with 50 per cent of the equity being offered to Indian parties.

The debt equity ratio is likely to be 70:30.

The US major intends to source the liquefied natural gas from its Qatar-based subsidiary.

Enron has also promised to help source foreign direct investment into the country to fund the projects, once all necessary clearances for the projects were received and land made available.