Special Correspondent

Loan agreements signed with


One is 1,000-MW project; the other

is 600 MW

CHENNAI: The Rural Electrification Corporation (REC), a public sector enterprise enjoying the status of ‘Navratna,’ has formally agreed to provide Rs. 7,627 crore for two power generation projects in the State.

The REC signed loan agreements with the Tamil Nadu Electricity Board (TNEB) and the Neyveli Lignite Corporation (NLC) on Friday.

While one pertained to the joint venture project promoted by the TNEB and the NLC at Tuticorin, the other related to the TNEB’s project on the premises of the North Chennai Thermal Power Station at Athipattu, near Chennai. The joint venture project envisaged production of 1,000 megawatt (MW) and the other, 600 MW.

P. Uma Shankar, Chairman and Managing Director of the REC, signed the agreements with S. Machendranathan, TNEB Chairman, and J.N. Prasanna Kumar, CMD of the NLC, at the Secretariat in the presence of Chief Minister M. Karunanidhi.

Mr. Prasanna Kumar, who is also the head of the special purpose vehicle promoted for the Tuticorin project, told The Hindu that contracts for all the packages would be settled by November-middle. In respect of the package for turbines and generators, the Bharat Heavy Electricals Limited emerged the lowest bidder. The plant would have two units of 500 MW.

The first unit would be commissioned by March 2012 and another by August 2012. Coal linkage had been firmed up with the Mahanadi Coalfields, Orissa. Of the project cost of Rs. 4,909 crore, the REC’s financial assistance would be Rs. 3,437 crore.

An official of the TNEB said the contract for the 600-MW unit at the North Chennai station had been given to the BHEL. This unit, costing Rs. 2,718 crore, would be commissioned by August 2011. The loan amount sanctioned was Rs. 2,175 crore.

A spokesperson of the REC said the Corporation had decided to fund one more unit of 600 MW at the station, which the BHEL would set up. This unit, estimated to cost Rs. 3,095 crore, would start generation by February 2011. The Corporation would give Rs. 2,475 crore.

A press release issued by the State government said the Corporation had also sanctioned four transmission and distribution projects, costing Rs. 3,340 crore. Its assistance would be to the tune of Rs. 3,113 crore.


All the capacity addition projects would generate employment to 9,000 persons.

Arcot N. Veeraswami, Electricity Minister, K. Gnanadesikan, Principal Secretary (Finance), Smita Nagaraj, Principal Secretary (Energy), and Shiv Das Meena, TNEB Executive Director, were among those present when the agreements were signed.

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