The Hindu : Business : Coastal Energen to build power project in Tuticorin

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Friday, May 02, 2008
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Coastal Energen to build power project in Tuticorin

Special Correspondent

Tamil Nadu Government has an option to buy 25% of power

CHENNAI: Coastal Energen Private Ltd., an arm of the Coal & Oil Group of Dubai, has announced that construction work on the initial phase of its proposed Rs. 8,500-crore two-phase 2,000 MW coal-fired merchant power project at Tuticorin in Tamil Nadu would commence by the middle of this calendar year.

Investment

The 1,080 MW (3X360 MW) first phase will involve an investment of Rs. 4,200 crore. It is expected to go on stream in 36 months from the zero date. Addressing a press conference here on Wednesday, Ahmed Buhari, President and CEO of Coal & Oil Group, said Coastal Energen had already acquired 1,000 acres to implement the project. He said the Tamil Nadu Government had the option to buy 25 per cent of the power generated by the project. He said the plant would use environmentally-friendly technology that would facilitate the use of multi-fuels.

Mr. Buhari said the project would have a debt-equity ratio of 70:30. Coal & Oil Group, he said, had invested in Coastal Energen through its investment arm in Mauritius. Abdul Wahid Al Rostamani Group of Dubai, with which Coal & Oil had a long association, had picked up a 30 per cent stake in Coastal Energen Private Ltd., he added.

A consortium of bankers led by State Bank of India, he said, had evinced interest in funding the project. He was confident that the project would see financial closure in two months.

Managing Director of the company, S. M. Zafrulla, said the SBI-led consortium had already given an ‘in principle’ approval for financing the project. “All the formalities regarding financial aspects will be over by the next two months,” he added.

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