The Hindu Business Line : First phase of Sagardighi project achieves financial closure

WEST Bengal Power Development Corporation Ltd (WBPDCL) has achieved financial closure for the first stage of the 2,000-MW Sagardighi Power Project (SPP).

The project is proposed to be set up in Sagardighi in Murshidbad district. While the Power Finance Corporation (PFC) will be providing 80 per cent of the Rs 2,057-crore required for setting up the two 250-MW units, the remaining 20 per cent will be given by the State Government.

These two units will actually form the first stage of the project. It is scheduled to be implemented in three phases with WBPDCL envisaging setting up another coal-based thermal unit of 500-MW before completing the project with two 500-MW units based on gas.

However, although the corporation signed two MoUs (one with Unocal Bharat) in July 2001, for importing natural gas, nothing had so far materialised on this front so far, the WBPDCL sources said. Financial institutions too had shown interest in implementing the gas-based project.

They said that as per earlier plans, the coal-based portion was slated to be implemented with assistance from the Asian Development Bank (ADB). However, although talks had begun with the multilateral institution, there was little progress as the Centre was not keen on considering this project for funding by the Manila-based institution.

Negotiations were then initiated with the Power Finance Corporation, which has now agreed to provide Rs 1,645 crores at 8.75 per cent interest. There are indications that this interest rate might be further lowered.

The foundation stone for the project is to be laid by the West Bengal Chief Minister, Mr Buddhadeb Bhattacharjee, on February 8.

The first unit is targeted to be implemented by March 2007 with the second unit after six months. The corporation will now appoint a consultant for the project and decide on whether it will adopt the international bidding route or the domestic one. "There are pros and cons on either side, but since there is no overseas funding — our options are open", sources said.

The entire project will need about 2,000 acres of land, of which about 66 acres have already been acquired. WBPDCL owns all the State-run thermal power plants in West Bengal (which it inherited as part of the State-level power sector reforms). It has four power plants including the Bakreswar Thermal Power Plant.