Tamil Nadu Electricity Board (TNEB) has entered into a joint venture agreement with Bharat Heavy Electricals Ltd (BHEL) on Wednesday to set up a 2 X 800 mw thermal power plant at Udangudi in Tuticorin district of Tamil Nadu with an estimated investment of Rs 8,700 crore. The agreement was signed in the presence of Chief Minister M Karunanidhi by chairmen of both TNEB and Bhel. A special purpose vehicle (SPV) called Udangudi Power Corporation Ltd has been floated to execute this project.
The project, coming up in 760 acres, will have equity investors other than TNEB, and Bhel. Institutions such as Rural Electrification Corporation (REC), Power Trading Corporation (PTC) among and a host of others are expected to invest in this project, said sources here. While BHEL will provide the entire equipment, the state electricity board will execute and run this project, government sources added.
It may be recalled that the state government has given its approval to conduct a project report in February this year. Currently the state government is involved in putting up basic infrastructure and has already completed marine bore hole study in this area. The state government has completed the environmental aspects of the project and has prepared a report in this regard.
Meanwhile, the consultants have submitted the feasibility report for the project and they are expected to submit a detailed project report for the project soon. Since the project will use coal as feedstock, the state government is proposing to set up a facility to import coal from abroad. In this regard, the state government has appointed Indian Institute of Technology, Madras to analyse the pros and cons of the proposed facility.
According to sources, while both TNEB and Bhel would be the major stakeholders, with others like REC and PTC chipping in funds for minority stakes, the remaining funds would be raised through debt from financial institutions. The first phase of the project is expected to go on stream by March 2012 and the second phase by September 2012.