New Delhi: The Indian unit of US power firm AES plans to invest Rs10,300 crore ($2.5 billion) in the power sector by 2011 and has set sights on having a total generation capacity of more than 5,000MW in the next 5-7 years.
“We have signed an MoU with Chhattisgarh Government to set up a 1,200MW coal-based plant in Raigarh district. Many clearances have been obtained... (we are) waiting for the coal mines to be allotted,” AES India Pvt Ltd, director (business development) Sanjeev Aggarwal told PTI.
For the project, the company has been given approval by the Foreign Investment Promotion Board and the Cabinet to bring in investments of Rs1,650 crore.
AES needs about 180 million tonnes of coal to meet the demand for 25 years of operation and has identified coal mines, he said, adding, “We have given the application to central coal ministry and hope to get the clearance fast”.
The company is in talks with financial institutions and banks to tie up funds. For the Chhattisgarh plant, AES is talking to IDFC, ICICI and World Bank’s private sector arm IFC, he said, adding the plant would be funded in a debt-equity ratio of 70:30.
The US firm, which is also running a 420MW power plant in joint venture with Orissa Power Generation Corporation with 49% equity and management control, is in the process of adding another 1,200MW at an investment of Rs4,800 crore.
The company’s portion in the expansion of Orissa project comes to about Rs2,300 crore. Of this, AES would pump in Rs575 crore as equity and the balance as debt.
AES has been operating the OPGC plant since 1998 and has been the highest dividend paying company to the state government for the last 4-5 years, Aggarwal said.
The company is selling power at a price of Rs1.60 a unit, he added.
He said the company was hoping to start work on the project in 2008 once all the clearances and fuel linkages were in place.
For both the plants in Orissa and Chhattisgarh, the company is planning to invite tenders for equipment by next month but no decision has been taken on the number of units and their size, he said.
“There will be international competitive bidding and in all probability, the unit size will be 500MW each in both projects,” he said.