Mumbai: The UK-based Essar Energy Plc on Tuesday said its subsidiary Essar Power Ltd (EPL) has entered into binding agreements for the acquisition of a 100% interest in Navabharat Power Pvt Ltd.

EPL will initially acquire 76% of the existing equity with the balance 24% being acquired upon completion of certain project milestones, a company statement said here.

Navabharat Power is a 2,250 MW coal-fuelled power plant being set up in Dhenkanal district in Orissa. The project is being implemented in two phases — the first phase of 1,050 MW and phase two of 1,200 MW at a total estimated capital cost of $2 billion.

The project includes the allocation of the Rampia Coal block of 112 million tonnes and a 4.7 million tonnes per annum tapering coal linkage with Coal India Ltd.

Phase I of the project already has in place a number of approvals, including environment clearances. All other approvals are being progressed, including land acquisition. Phase I is expected to achieve financial closure by end of CY 2010.

The advance stage of the approval process is expected to save about two-years of execution time compared to a greenfield investment, the release said.