Ispat, Abb Plan Rs 1,600cr Power Plant In Ap

The M L Mittal-controlled Ispat group has chalked out plans for setting up a 468mw naphtha-based power plant in Andhra Pradesh in collaboration with Swedish multinational ABB.

The cost of the project, which has a 70:30 debt equity ratio, is estimated at nearly Rs 1,600 crore.

Company sources said the power plant will be set up by Ispat Power, a joint venture formed earlier this year between the Ispat group and ABB.

The Swedish major is expected to pick up 26 per cent of the equity in the new company.

The agreement with ABB has 'in principle' been completed, though the final details are yet to be sealed, sources said.

 

A Swiss export credit loan of $200 million will be coming from ABB, which is the EPC and ONM contractor for the project. The Swiss loan is expected to be wrapped up within the next couple months, while another Rs 200 crore will be sourced as local loans from Indian financial institutions. At present, the company is in talks with ICICI and IDBI in this regard, sources said.

The 468mw plant will be the second project on which the Ispat group will be teaming up with ABB.

The Swedish major has been assigned by Mittals flagship Ispat Industries Ltd for setting up a 350mw captive power plant at Dolvi, Maharastra.

The Dolvi plant will also be naphtha-based and has a project cost of Rs 1,000 crore and will supply power to the companys proposed Rs 4,750 crore hot-rolled (HR) mill at Dolvi.

The Andhra Pradesh power plant, to be located at Vemagiri near Rajmundri, will be an independent power project (IPP).

The project has an implementation period of 26 months and is expected to be operational by the third quarter of 1999.

The power purchase agreement (PPA) for the project was signed on March 31, this year after the Mittals acquired the contract for the project through participation in the global tender floated by the Andhra Pradesh State Electricity Board earlier.

The company is currently awaiting the clearance of the Central Electricity Authority which will be forthcoming with the sanctioning of the fuel linkages by the state government.

All other clearances related to the project have been received, sources said.

The 468mw capacity plant will supply power to the Andhra Pradesh State Electricity Board for which a fixed tariff structure has been finalised for the next 15 years.

The details of the tariff structure will be available after the conclusion of a formal agreement with the state government, sources said.

Sources said the plant will be set up by Ispat Power, formed earlier this year by the Ispat group and ABB. The Swedish major is expected to pick up 26 per cent of the equity in the new company.