Mahagenco will spend Rs 8,700cr to add 2,000 MW capacity

MUMBAI: In about a month’s time, the Maharashtra State Power Generation Company (Mahagenco), the generation arm of the Maharashtra State Electricity Board, would launch its ambitious Rs 8,700 crore capacity addition programme to add another 2,000 MW.

“Stage is set to begin construction. We have received all mandatory sanctions and the machinery for the plants is on its way,” top functionary of the Mahagenco told ET. The expansion plan has been drawn in order to bridge the ever-widening power deficit in the state, which may reach 10,000 mw by ’12.

The work on two plants of 250 MW each at Parli and Paras is expected to begin in another week’s time, on 500 MW at Khaparkheda will begin by September and two 500 MW Bhusawal expansion project will be kicked off by October this year. The generation from these projects would begin from February ‘09 onwards. The new projects would cost Rs 1091 crore, Rs 1,224 crore, Rs 2,170 crore and Rs 4,124 crore respectively.

All the projects are coal based and Mahagenco would need an additional 22.5m tonne of coal per annum of which 17.5 mtpa will come from domestic mines while the rest will be imported. The proposed Parli and Paras plans would need 1.2m tonne coal per year each for, while 2.5m tonne per year each would be needed at Kharparkheda and Bhusawal.

“We have already tied up linkages for providing coal,” an official said. The union ministry of coal recently awarded Mahagenco, in association with Gujrat power utility, an exclusive mining rights for Machhakata and Mahanadi coal blocks that would contribute around 8 mtpa.

Mahagenco plans to finance this program at a debt equity ratio of 80:20 of which the latter, about Rs 1,722 crore, will come from the Maharashtra government. Besides this it has tied up with the Rural Electrification Corporation (REC) and the Power Finance Corporation (PFC) for long-term loans.

REC will finance 80% of the Bhusawal project at Rs 3,300 crore and the PFC will lend Parli, Paras and Khaperkhed projects at Rs 3,471 crore. The loan shall be repayable over a period of 10 years from the date of commissioning of the projects and it would carry an interest rate of 9.75% per annum. The average cost of power for consumers would be in the range of Rs 2.44 to Rs 2.71 per unit, the Mahagenco estimates suggest.