GNFC to build Rs 150-cr power plant in Gujarat

AHMEDABAD: Gujarat Narmada Valley Fertilizers Company (GNFC) is setting up a 33-MW power plant in Bharuch to support ongoing expansion. The company will invest Rs 150 crore to set up the gas-fired power plant. GNFC has filed the necessary applications with the Department of Industrial Policy and Promotion (DIPP) in the first week of August. The company has also filed an IEM with DIPP to manufacture methanol, an existing product of the company.

Since it is located near Dahej, next to the gas grid, the company need not lay a pipeline for the project, said sources. According to industry sources, manufacturing fertilisers requires significant loads of electricity. Power accounts for nearly 30% of the total cost in producing certain fertilisers. “A gas-fired plant to generate power for captive consumption will cut down costs substantially,” said an analyst.

The Bharuch-based state-owned company has already lined up Rs 1,200 crore for expansion. GNFC plans to invest about Rs 750-800 crore to convert its ammonia plant from low stock high sulphur (LSHS) to gas. Sources said the company is in talks with Reliance and GAIL India for gas supply.

Sources told ET that the conversion process was in line with the central government’s guidelines for cost-effective production of fertilisers. GNFC plans to fund the expansion with assistance from the central government, internal accruals and borrowings. Earlier this year, the company had pledged to invest over Rs 900 crore in a methane project.