The Essar group is planning to invest over Rs 5,000 crore to set up a 1200-MW power plant in Jharkhand. The group has set up a special purpose vehicle — Essar Power (Jharkhand Ltd), a 100 per cent subsidiary of Essar Power Holdings — to set up the plant.
The company will set up two coal-based projects with a generation capacity of 600 MW each. “We are planning to have a 6,000-MW power generation capacity over the next five years. In Jharkhand, we have been allocated a coal mine in Chakala. Right now, we are working on the financial closure, which will be finalised by the end of this fiscal,” Essar Power Managing Director Arun Srivastava said.
The coal mine will provide captive coal over the next ten years, he said. The group has started acquiring 1,500 acres of land for the power project, which has been named as Tory Power Project.
Essar Power is in the process of completing a detailed project report for tying up the finance. The project will have a debt equity ratio of 3:1 and is scheduled to be completed in four years, Srivastava said. The company has decided to invest another Rs 5,000 crore for a 1.200-MW power plant in Mahan, Madhya Pradesh.
At present, Essar has five operational power plants at Hazira, Vadinar and Vishakhapatnam with a total generation capacity of 1200 MW.
The gas-based plant at Hazira has a generation capacity of 515 MW, out of which 315 MW goes to the Gujarat Electricity Board, while 200 MW is used by Essar Steel for captive consumption. The company has another 500 MW plant in Hazira, which currently generates 315 MW for Essar Steel. Besides, it has a 120-MW co-generation plant in Vadinar for the captive power purpose of the refinery and another 35 MW coal-based power plant in Vizag for the steel plant.
“Most of these existing projects cater to the captive power requirements of our group companies. But from Jharkhand, we will supply electricity to the grid,” Srivastava said. The group will supply power from Jharkhand at Rs 2.10 per unit electricity.