Coal India’s (CIL) arm - Mahanadi Coalfields (MCL), is planning to set up a 1,600-Mw power plant in Orissa entailing an investment of Rs 9,000 crore. The pithead plant would be fed by the company’s stranded coal asset near the Ib valley in Jharsuguda, Vasundhara. MCL will develop the coal block on its own.
For this project MCL plans to form a special purpose vehicle (SPV) and it will rope in a partner to pick up as much as 74 percent in SPV. The coal producer will own the remaining stake. It had recently called a pre-bid conference for the project where companies where overwhelmed by the project due to the assured coal supply and equity contribution being lower.
MCL would pump Rs 700 crore into the project, while the rest would be invested by the partner who wins the bid. Apart from equity contribution, MCL for its personal consumption plans to buy 25 percent (400 Mw) of the 1,600 Mw power to be produced. However, the project is yet to get permission from the government to use coal from the Vasundhara block, as well the land.
MCL would need the government’s approval to use the land as it would be for a different purpose. Acquiring new land in Orissa is a tough proposition. Unless land is provided by the company, it will become a very tough project to execute. The bids for the project will be sought after these issues are settled by the company. MCL would take care of other requirements like water supply and environmental clearances. Power Finance Corporation is advising MCL on the project.
| Company Name | CMP |
|---|---|
| Coal India | 438.70 |
| NMDC | 89.78 |
| GMDC | 733.40 |
| Sandur Manganese | 218.35 |
| MOIL | 327.60 |
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