Lanco Power To Set Up 355mw Plant In Ap

The Andhra Pradesh-based Lanco Power Ltd is setting up a 355 mw naphtha-based power plant in the state.

The project is estimated to cost Rs 1102.5 crore.

The company has signed a draft power purchase agreement (PPA) with the state electricity board (SEB).

The state government has extended counter-guarantee in case the SEB defaults in payment for the power purchased from Lanco. The PPA would be valid for 15 years.

The company has already been allocated the required fuel linkage by the state government from its share allocated by the Centre for generation of 1500 mw of power through liquid fuel.

 

The project will have a debt-equity ratio of 70:30. The total equity component is valued at Rs 330.8 crore while the loan component is estimated at Rs 771.7 crore.

The Indian and foreign equity components have been estimated at Rs 165.78 crore each which works out to 15 per cent of the total project cost.

The break-up of the debt component is likely to be 40 per cent foreign and 30 per cent Indian respectively.

The debt will be financed by US EXIM Bank, other international banks and all India financial institutions.

US EXIM Bank and Indian financial institutions would be financing 30 per cent each which works out to Rs 661.6 crore. Other international banks would be financing ten per cent (Rs 110.1 crore) of the project cost.

The erection, procurement and construction (EPC) costs for the project has been estimated to be Rs 764.7.03 crore which works to roughly 70 per cent of the total project cost.

The company expects to tie-up finances for the project by the end of September this year. The plant is expected to be commissioned in 22 months after financial closure.

Andhra Pradesh Industrial Infrastructure Corporation has allocated 104 acres of land to the company in Kondapalli district near Vijaywada.

The draft PPA suggest that the company would be getting an incentive of two per cent on other fixed charges (OFC) for every per cent increase in plant load factor (PLF) for operations between 80-85 per cent PLF.

The incentive for operations between 85-90 per cent PLF is three per cent of the OFC.

The company is still awaiting techno-economic clearance from the CEA and clearance from the ministry of environment and forests for the project.