p"The capacity augmentation will require a meagre investment of around Rs 50 crore and help the company in lowering the electricity tariff, Essar Power director & CEO Arun K Srivastava said.

"The investment would be limited as the waste heat from the adjoining two million tonne steel plant would be used for steam generation and this steam would be injected into the gas turbine," he added.

Of the 515 mw generated at its combined cycle power plant, Essar Power supplies 300 mw to the Gujarat Electricity Board (GEB), while the balance 215 mw is sold to Essar Steel.

According to Srivastava, the enhanced capacity would be offered to both clients - GEB and Essar Steel - in the current ratio. "If GEB does not want to buy its share, the same would be sold to the Essar Steel," he said.

Besides, Essar Power is also planning to set in motion the second phase of expansion, which involves the setting up of another 515 mw unit at the same location.

The company has already received the "in-principle" approval from the state government for the proposed expansion, including the crucial techno-economic clearance, and the financial closure is expected shortly.

Besides, Essar Power has also proposed to set up another 342 mw power project at Bhander, Madhya Pradesh. The liquid fuel based project has all the statutory clearances in place, although it has yet to get the escrow account facility from the Madhya Pradesh Electricity Board.

The Essar group, Srivastava said, also proposes to set up a 77 mw captive power project at Vadinar, Jamnagar, to supply power to its refinery which is under construction.

Essar Power H1 net rockets 160%
Essar Power has reported a 160 per cent rise in net profit to Rs 39 crore during the six months ended September 1999, compared with Rs 15 crore in the corresponding period last year.

Total income rose 8.91 per cent to Rs 379 crore, up from Rs 348 crore during the same period last year. Total expenditure increased 14.77 per cent from Rs 149 crore to Rs 171 crore during the period.

Essar power is promoted by Essar Steel, which has a 42 per cent stake in the company. Essar Oil holds a 9 per cent stake, while the balance 49 per cent is held by Prime Hazira, a Mauritius-based holding company of the group.

EPL which has signed a memorandum of understanding (MoU) with Marathon of the US for the sale the entire stake of the power company would review this agreement as the agreement expires on December 9, 1999.

One of the conditions of the proposed sale off is that GEB should allow the new owner to continue with the present arrangement of supply of power to the Essar Steel as per the PPA. However, GEB has yet to notify the company on the issue.