Ispat Industries To Sell Excess Power To Mseb

Ispat Industries proposes to sell the excess power generated by its 354 MW captive plant at Raigarh to the MSEB. It is to be sold at a rate 15 per cent lower than MSEB's average realisation. Besides, the company also plans to sell the excess oxygen produced by its air separation plant.

Ispat Industries had recently decided to increase the capacity of its captive power plant from 250 MW to 354 MW. It had entered into a turnkey Rs 768-crore contract with ABB, Germany for the purpose.

The equipment is to be supplied by ABB Kraftwreke, Austrian Energy and Environment Austria.

 

The equipment for the air separation plant is worth Rs 150 crore and the contract for the plant has been bagged by Mitsui and Co.

The total requirement of power for the integrated steel plant, at optimum utilisation, has been estimated at 338 MW, comprising 263 MW for the HR project, 25 MW for the sponge iron plant and another 50 MW for Ispat Metallics' blast furnace requirement.

The captive power plant will operate on the combine fuel technology, using naphtha as a primary fuel for the turbine generator and furnace oil and blast furnace gas as fuel for the steam generator. Ispat has obtained sanction for 25 MW at 220 KV from MSEB's Nagothane sub-station for its sponge iron plant. It has also got the clearance for the supply of an additional 250 mw power for the proposed project.

The capital cost for HR to be produced at Ispat's integrated plant is expected to be one of the lowest in the country, at Rs 22,247 per tonne, while the cash operating cost is around Rs 7,945 per tonne.

The capital cost for Essar Steel and Jindal Vijaynagar is Rs 25,840 per tonne and Rs 29,636 per tonne respectively.

Ispat's 3 million tonne integrated steel complex, coming up at Dolvi in Raigarh, is expected to be commissioned later this year. The plant will be using barges to transport the raw material and the finished product from the plant. The site has a captive jetty for the docking of these barges.

It has acquired three barges and has placed orders for six more of 2,500 DWT each. The barges will cost Rs 30 crore, sources said.

Ispat Industries is currently raising Rs 800 crore through a rights issue which opened on May 8, to part finance the plant.

The issue has been awarded a credit rating of CARE BBB+.