REC Signs Pact With NTPC Tamil Nadu Energy (07-Mar-2010)
In order to fund a power project in North Chennai, Rural Electrification Corporation Ltd. (REC) has inked a Memorandum of Understanding (MoU) with NTPC Tamil Nadu Energy Company Ltd. (NTECL)
Mr. N Suriyanarayanan, CEO of NTECL said the company is eyeing to establish a 2X500 Mw Greenfield power project at Vallur (North Chennai). The project in Phase I entails an investment of Rs. 5,423 crore.
Out of the total project cost, 30 % is being met by equity and balance 70 % through debt.
REC has already approved the total debt portion of Rs. 3,796.48 crore for Phase I. During March or April 2011, Pre-commissioning is expected to commence and by December 2011 both the units will start the full production.
Mr. Suriyanarayanan said one more unit of 500 Mw power plant taking an investment of Rs 3,020 crore would come up at the same site, for which REC has already approved the entire debt portion of Rs. 2,114 crore. This unit is likely to commence operation in November 2012 and TNEB is expected to get 1,125 Mw from all the projects.
Mr. P Uma Shankar, Chairman and MD of REC said earlier the company has already sanctioned Rs. 16,997 crore to implement 5,200 Mw of thermal power generation projects in Tamil Nadu. Besides Vallur projects, the company has also sanctioned Rs 3,437 crore to NLC Tamil Nadu Power Ltd, for setting up a 1,000 MW power plant at Tuticorin.
Likewise, another project costing Rs. 4,650 crore has been given for setting up the 2X600 Mw North Chennai Thermal Power Project Stage-II and Rs 3,000 crore to Udangudi Power Corporation Ltd, for setting up a 1,600 Mw super critical thermal power project at Udangudi (Tuticorin district).
However, the project is facing 2 main issues including environment clearance from the Centre and coal-linkage, since it comes under the 12th Five Year Plan (2012-17).
Mr. CP Singh, Chairman of TNEB said the company has requested the government to look at the project as a special case.
Moreover, in order to overcome the shortage, the state government has decided to purchase 2,000 Mw from the open market, which is around 1,800 Mw.
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