MUMBAI (Reuters) - Ideal Energy Projects Ltd, a Mumbai-based firm, is setting up a 540 MW power project in Maharashtra and will later raise funds via a public share offer, a founder of the firm told Reuters on Monday.
“It is a coal-based power project near Nagpur. After commissioning the first plant (of 270MW),...we will go for an IPO,” D.P. Mhaiskar, founder and executive director of the firm told Reuters in an interview.
The first phase of 270 MW will be commissioned by November 2011 and the second phase a year later.
Mhaiskar and his family are also founders of IRB Infrastructure Developers, although the road construction firm doesn’t hold any stake in Ideal Energy.
Ideal Energy is in talks with a private equity investor to offload 30-35 percent stake in the firm, said Mhaiskar who currently owns 50 percent stake in Ideal, while the rest is held by his son, Chairman J.D. Mhaiskar.
“We hope to see PE agreement through, in a month’s time,” said Mhaiskar, declining to identify the PE investor.
The project will cost 14.77 billion rupees in the first phase and 12.60 billion rupees in the second phase, he said.
The first phase of 270 MW has tied up funding from a consortium of six banks who are lending 75 percent of the money, while 25 percent will come as promoter’s equity, Mhaiskar added.
The bank consortium is led by Canara Bank and includes Bank of Baroda, Corporation Bank, Andhra Bank, Union Bank and Punjab National Bank, he added.
“We have already placed an order with Bharat Heavy Electricals Ltd (BHEL) and civil work will be done by McNally Bharat.”
BHEL will provide boiler, turbine and generator package for 7 billion rupees, while McNally will provide the remaining plant equipment as well as construction at a cost of about 4.5 billion rupees, Mhaiskar said.
“The work has commenced for the first phase; 200 acres of land is in our possession,” Mhaiskar said.
Coal will be supplied through mines of Coal India units including Western Coalfields Ltd, while water is allocated from the near-by Wadgaon dam, he added. Development Consultants Pvt Ltd is appointed as the consultant to the project.
“We expect permissions for the second phase in about a month’s time.”
The power firm will sell 170 MW of power per day from its first phase through a power purchase agreement (PPA) with Reliance Energy Trading Ltd, an associate of Reliance Infrastructure, he said.
“Under the PPA, Ideal will sell the power to Reliance Energy Trading at a fixed cost of 2.03 Rs per kWh,” with separate variable cost component, Mhaiskar added.
The company intends to sell the balance 100 MW in the open market as a merchant power.
(Editing by Ramya Venugopal)
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