The Hindu Business Line : DVC, Tata Power sign pact for Jharkhand project

DAMODAR Valley Corporation (DVC) on Friday signed the shareholders agreement with Tata Power Company (TPC) for executing a 1,000-MW thermal power project in Jharkhand through the joint venture route.

"We are signing the agreement with TPC today. The joint venture company - Maithon Power Ltd (MPL) - will implement the 1,000-MW Maithon Right Bank project," the DVC Chairman, Mr R.K. Singh, said after signing a loan agreement with the Power Finance Corporation (PFC). Tata Power would hold 74 per cent equity, while DVC would take the remaining 26 per cent in the project, he said.

The estimated cost of the project would be Rs 4,000 crore, Mr Singh said. He added that the project would be implemented in a debt-equity ratio of 70:30. DVC would approach PFC for funds once the financial details are worked out, he said.

DVC, which has an installed generation capacity of about 3,000 MW, plans to add another 9,000 MW generation capacity in Jharkhand and West Bengal by the end of the Eleventh Plan. Besides, Maithon Right Bank project, MPL is also likely to execute the 2,000-MW Maithon Left Bank project.

Mr Singh said the company was also looking at forming joint ventures for executing the 1,000-MW Ramgarh plant and 1,000 Panchet project. DVC has also formed a 50:50 joint venture with SAIL for a 1,000-MW project at Bokaro.

PFC has sanctioned two loans valued at a total Rs 2,891 crore to DVC for two 500-MW projects, said the PFC Chairman, Mr V.K. Garg. PFC has approved a loan of Rs 1,456 crore for setting up two units of 250 MW each at DVC's coal-based Mejia extension project in West Bengal and Rs 1,435 crore for adding similar capacity at the Chandrapura extension project in Jharkhand.

Following the sanction, both the projects have now tied up all the funds for the project. Both the projects are to be commissioned before March 2007. The total estimated cost of these two projects is Rs 4,133 crore, which includes Rs 1,242 crore of equity, and the rest Rs 2,891 crore of debt.

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