GMR Infrastructure Ltd, the company leading the modernization of the New Delhi airport, plans to increase the capacity of its power plants by nearly half, by setting up a 1,000 mega-watt (MW) coal-based thermal power plant in Chhattisgarh.
This project will take the firm’s power capacity to 3,158.5MW.
The project, on which a memorandum of understanding has been signed with the Chhattisgarh state government, will enable the developer to sell power to the southern and western power grids in the country.
Both regions are power starved.
A key factor for success of the project would be “merchant sale of power (to buyers other than the Chhattisgarh state) would enable the GMR project improve its profitability significantly,” said Arvind Mahajan, executive director of consultant KPMG.
The cost of the Chhattisgarh power project is estimated to cost more than Rs4,200 crore, said GMR group director, energy, K.V.V. Rao. The project will be financed with equity of Rs1,260 crore and Rs2,940 crore debt.
The company is open to the option of roping in strategic investors into the project for equity capital, Rao added. GMR Energy, a unit of publicly-listed GMR Infrastructure, signed an agreement with Raipur on 4 June to set up the power plant.
An evaluation committee of GMR is currently identifying a suitable project site in Chhattisgarh close to coal mines, water and transmission corridor. “We expect to complete this and firm up a project site in a month’s time. The project feasibility studies will begin in a fortnight and the report should be ready in six months. It will take three-and-a-half to four years time for the project to take-off,” Rao said.
GMR Infrastructure, which is constructing a new airport in Hyderabad, operates two 220 MW plants each in Chennai and Mangalore, while a 388.5 MW plant at Vemagiri, Andhra Pradesh, was recently completed.
Other projects being developed is a 140MW hydroelectric power plant in Uttaranchal and another 160MW hydel project in Arunachal Pradesh.
Besides the Group is already in negotiations with several Chinese, Japanese and Korean firms for its 1,050MW coal based power project coming up in Orissa.
Shares of GMR Infrastructure rose 2.14% to Rs498.55 each on Tuesday, closer to its 52-week high of Rs516.30 than its one-year-low of Rs205.