Tata Power eyeing projects in SE Asia

By Hiral Vora

MUMBAI (Reuters) - Utility Tata Power Co Ltd is considering building power plants in Southeast Asia and is looking at mines in Indonesia though rising coal prices are making acquisitions expensive, its managing director said.

The company, India's oldest private power producer, is spending more than $6 billion to quadruple domestic capacity to 10,000 megawatts by 2013 from 2,300 megawatt.

"Instead of putting everything into India, we would be happy to expand overseas and look at Southeast Asia," Prasad Menon told Reuters in an interview on Friday.

Last year, Tata Power, valued at nearly $6.5 billion, was interested in Singapore's Tuas Power but rival Reliance Energy Ltd was shortlisted from nine firms for the sale by state-investor Temasek Holdings.

Rising coal prices are making it expensive to acquire foreign mines, but the company is on the hunt, Menon said.

"We are looking for mines and offtake agreements in Indonesia and elsewhere, where we can find a combination of equity and long-term supply contracts," he said.

The company had earlier said it was eyeing coal from mines in South Africa and Mozambique.

Contract prices of thermal coal in Asia may rise by as much as 200 percent after recent supply disruptions, according to Merrill Lynch report on Friday.