The project is expected to generate cash flows to yield a return of 14% annually on the equity capital.
In an exclusive interview to FE after RGPPL formally took possession of the Dabhol power project assets in the first week of October, a senior IDBI official said earnings from the project would depend on cost of completion, the negotiated price of gas and the tariff. The estimated cost for the revival of phase-I and the completion of phase-II would be around Rs 10,303 crore.
Apart from IDBI, the state-run National Thermal Power Corporation (NTPC) and GAIL India have pumped in Rs 500 crore each to pick up equity in RGPPL. Besides, RGPPL is in the process of negotiations with suppliers of gas, construction contractors.
Cash flows projected to yield a return of 14% annually on the equity capital
The power ministry has asked RGPPL to revive phase-I by May 15 next year while phase-II, which comprises the regasification plant, is to be commissioned during August and November next year.