The board of JSW Steel has approved the formation of a special purpose vehicle (SPV) by the company’s subsidiary JSW Bengal Steel Ltd (JSWBSL) jointly with JSW Energy Ltd. (JSWEL) for setting up a 1,600-MW power plant in West Bengal.

The company said that it would use coal from the Icchapur mines for this thermal power project which would come up in two units of 800 MW each at a cost of Rs.9,680 crore, comprising Rs.7,680 crore for the power plant and Rs.2,000 crore for the mines development. The units are targeted to be completed by March 2015 with the first unit coming up by March 2014. Land for the project is already with the company at Salboni in Paschim Medinipur. The project cost is proposed to be funded on a debt-equity ratio of 3:1. The total equity will be Rs.2,420 crores with a debt component of Rs.7,260 crores. With JSWBSL holding 26 per cent equity the group would have to raise Rs.629 crore.

The board also announced the appointment of Vijay Kelkar as an additional director.

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