Financial Daily
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Thursday, July 26, 2001



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IPPs in AP seek time for financial closure

V. Rishi Kumar


THE Andhra Pradesh Government has requested the Union Government to extend time for achieving certain milestones in terms of natural gas supply agreements and finalisation of fuel allocations and naphtha supply and to pave the way for `financial closure' of the pipeline independent power producers (IPPs).

This development follows a recent meeting between the Chief Minister, Mr N. Chandrababu Naidu, and the Union Power Minister, Mr Suresh Prabhu.

During the meeting, other vital issues relating to fuel allocation for IPPs, cost of power generation of these projects and matters relating to financial institutions had come up for discussion.

It may be recalled that the Union Government had recently announced the clearance of some six IPPs which will pave the way for them to go ahead with negotiations with financial institutions for their financial closure.

They include, one coal-based thermal project of BPL (520 MW) at Ramagundam and rest natural gas-based planned in the coastal region.

Konaseema Oakwell (455 MW), Gauthami and NCC (464 MW), Vemagiri Ispat (370 MW), GVK Jegurupadu Phase II (220 MW) and BSES (220 MW) are natural gas-based projects. Fuel allocation had been made to most of them.

In addition, during the meeting, the State Government had requested an power allocation of 100 MW in addition to the existing allocation of 162 MW from the unallocated Central pool. This was felt necessary till March 2002 when the State would have additi onal 500 MW from the first unit of the NTPC Simhadri thermal power project.

The 1000-MW coal-based NTPC Simhadri project is at an advanced stage of implementation and the first phase is expected to be commissioned early next year.

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