A consortium led by Madhucon Projects (Nama Nageswara Rao, Chairman) has received a letter of intent
to set up 300 mw (2 x 150 mw) coal-fired power plant at south Sumatra
in Indonesia. The mine-mouth project would be set up on a
build-operate-transfer basis.
The project would come up close to a coal mine owned by PT Madhucon
Indonesia at Dawas. This mine is expected to assure the supply of coal
to the project and also offer significant cost benefits.
According
to sources, the power project would cost about Rs1,800-2,000 crore. The
company would achieve financial closure for the project in about a
year’s time and would have another 36 months from there to complete the
project. The company officials were not available for providing the
details.
A special purpose vehicle would be incorporated to handle
the power project and Madhucon Projects would hold about 65% stake in
the SPV, while its other group companies would hold the remaining 35%.
However, Madhucon will have to sell the power produced to the Indonesia government-owned energy company PT PLN.
According
to a communiqué from the company to the exchanges, the SPV would enter
into a 25-year power purchase agreement with PLN.
The state-owned
company has a monopoly over electricity distribution in Indonesia. Under
the Indonesian laws, though the private companies are allowed to sell
power to the consumers directly, they have to use PLN’s electricity
network to reach the consumers.
Interestingly, the company’s Dawas
coal mine spread in about 8,600 acre is expected to have significant
coal reserves to the tune of about 900 million tonne.
The mine would commence production sometime in February 2012.
The
company, which has a mining licence for Dawas site, would use the mined
coal for its new power project and explore the possibility of exporting
it to India.
Meanwhile, Madhucon Infra, a subsidiary of Madhucon
Projects Ltd, is also setting up a 1,920 mw coal based power project
near Nellore in AP. The construction of Phase I of 300 mw is said to be
complete and is heading towards synchronisation.
The project,
being set up by an SPV Simhapuri Energy, would enter into Phase II of
another 300 mw sometime in August 2012. The company has applied for
clearances for Phase III of 1,320 mw, which would commence activities in
the second half of 2012.
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