Kolkata: The Visa group will invest Rs4,500 crore in setting up a 1,000MW mega thermal power plant in Orissa and also engage in all-India power trading, diversifying from steel.
Besides setting up the 4x250MW power plant, to be operational in phases from 2010, the company plans to get into third party power trading by next quarter. Later it will sell the power generated on its own, Visa Power Ltd (VPL) managing director Vikas Agarwal told PTI.
“We hope to get trading license from the Central Electricity Regulatory Commission (CERC) by this month. The first transaction of trading of power is expected to be executed by August,” he said.
VPL will participate in tenders for surplus power from the eastern region and will sell its produce in north and western parts of the country.
Agarwal said that its first 250MW power unit will be operational by September 2010 and every six months thereafter a unit of 250MW will be added.
“The 1,000MW capacity would be reached by March 2012,” he said.
VPL intended to fund the equity component of the project from its parent companies, Visa Minmetal AG, Switzerland and Visa International Limited.
“The debt-equity ratio for funding will be 70:30. Equity for the initial plants of 250MW each will be funded by Visa Minmetal as FDI,” Agarwal said.
The 1,000MW coal-fired power project will be located either at Choudwar in Cuttack district or at Bajrakot in Angul district of Orissa. Detailed appraisal of the two locations was underway and likely to be finalised soon, company officials said.
The Power Purchase Agreement (PPA) for the sale of power from the plant has already been tied up for 50% of the capacity and a dialogue is on with licensees in other states for the balance power.
VPL proposed to sell 250MW to Gridco, the bulk supply licensee in Orissa, 250MW to Visa Steel and 250-400MW gross to Power Trading Corp. Further, through Delhi Transco Ltd, it will sell 10-25% of the power generated from the project.
The project was expected to require approximately 6.2 million tonnes of coal per annum. The coal is to be procured through coal linkage till such time that a coal block was allotted. All necessary approvals and clearances have been obtained and coal production from the mine has begun to meet the entire demand of the power plant.
VPL had signed an MoU with the government of Orissa in September last year.