The boards of the two companies had given in-principle approvals for the setting up of a 500 MW coal-fired power plant a few months back, SAIL chairman VS Jain said. The plant will come up in Bhilai.
The new plant is being set up so as to meet the expected power requirements as the company increases its capacity in phases to 20 mt by 2012, he said.
Mr Jain said the cost of the plant would be Rs 2,000 crore, with a debt component of Rs 1,400 crore and equity component of Rs 600 crore, representing a debt-equity ratio of 70:30.
SAIL will contribute Rs 150 crore towards the equity of the new plant, representing 50 per cent of the equity. NTPC will contribute the balance Rs 150 crore (50 per cent). The plant, according to current estimates, will be commissioned by 2007.
The operation and maintenance of the plant will rest with NTPC, Mr Jain said, adding that tendering for the plant will commence very soon. With the setting up of the new power plant, SAIL will not find any difficulty for sourcing its power requirements when the expanded capacity is commissioned.
Currently, SAIL does not face any shortage for its power requirements of 500 MW. Subsequent to the expansion, the companys power requirement will go up to 800 MW, the SAIL chairman informed. The surplus power will be wheeled to the grid, he added. Presently, SAIL sources 46 per cent of its power requirement through captive power plants and the balance is sourced from the grid.