State-run NHPC has decided to expand in the thermal power business, a move that will put it into direct competition with larger peer NTPC, the country’s biggest thermal power producer.
The company has decided to pick up majority stake in the 1,320-MW Sarguja power project in Chhattisgarh that was earlier proposed to be developed jointly by the state and the Indian Farmers Fertiliser Cooperative (IFFCO).
?We have decided to pick up 74% stake of IFFCO in the joint venture power project in Chhattisgarh being developed on super critical technology. A MoU in this regard has already been signed with Chhattisgarh State Power Holding Company (CSPHCL) and Indian Farmers Fertiliser Cooperative (IFFCO),? NHPC director finance ABL Srivastava said.
?We intend to complete the power plant in 44 months time after getting the approval from Cabinet Committee on Economic Affairs,? he added.
NHPC is expected to pump in close to Rs 6,500 crore into the project by virtue of its holding in the new entity that would be re-christened after change in the ownership pattern from the earlier IFFCO-Chhattisgarh Power Limited. The total investment required in the power project is close to Rs 5,000 crore while the balance is needed for the development of 400 KV transmission line required to evacuate the power.
Even after it signed an agreement in 2005, IFFCO did not show interest in moving forward with the Chhattisgarh project. The fertiliser major had inked an agreement with the state government and Chhattisgarh State Electricity Board (CSEB) for a thermal power plant under a 74:26 stake participation with CSEB.
For NHPC, the development is significant as it will give its access to thermal power business where the company was earlier barred from any direct participation.
With a development time of less than four years, thermal project would take away some of the risk involved in developing hydel that is not only costly but also require a lot longer time to commission. Almost entire 4,000 MW of hydel power projects being developed by NHPC are delayed due to some reason or the other resulting in cost escalation.
NHPC had indicated its intent of thermal foray few years back through its subsidiary Narmada Hydroelectric Development Corp (NHDC) stationed in Madhya Pradesh.
The 51:49 subsidiary between the NHPC and the Madhya Pradesh government has already commissioned hydroelectric projects of 1,500 MW and has a mandate to build even coal-based projects in the state.
