Essar wins bid for power project

Essar Power (Gujarat) Ltd (EPHL), a subsidary of Essar Power Holdings Ltd, has won the bid for the 1,200 MW power plant in Gujarat. The project will use high quality imported coal as fuel and is estimated to be completed by 2011 and cost Rs 4,800 crores. The company in a press release said that it plans to finance the project with a 3:1 debt to equity ratio.
EPHL has also planned to increase its power generation capacity from 1,200 MW to 6,500 MW by 2012 with an investment of Rs 20,000 crores. EPGL has entered into a 25-year power purchase agreement with the Gujarat government for supplying 1,000 MW of power at a levellised tariff of Rs 2.40 per unit with a clause to sell the balance power. The project will come up on 700 acres of land near Khambalia in Jamnagar district of Gujarat. Essar will create its own captive infrastructure to receive imported coal by setting up a port and other related facilities in Kutch since the region is known for its natural deep water draft and the ability to handle vessles all round the year. Essar has till date completed five power projects with a capacity of over 1,200 MW.