Special Correspondent

Signs joint venture agreement with Gayatri Energy Ventures

Project will achieve financial closure by mid-June

SPV will invest

Rs. 6,869 crore

in first phase

HYDERABAD: In one of the largest foreign direct investments (FDI) in the power sector, Singapore-based Sembcorp Utilities has acquired 49 per cent stake in the Rs. 1,042-crore in Thermal Powertech Corporation India (TPCIL), the special purpose vehicle (SPV) for setting up 1,320 MW (Phase-1) thermal plant at Krishnapatnam in Nellore district, Andhra Pradesh.

Sembcorp Utilities Pvt Ltd, a subsidiary of Sembcorp Industries, signed a joint venture agreement with Gayatri Energy Ventures Pvt. Ltd, a subsidiary of infrastructure company, Gayatri Projects. The agreement was signed in the presence of Union Power Minister Sushil Kumar Shinde and Andhra Pradesh Chief Minister K. Rosaiah. TPCIL will invest Rs. 6,869 crore in the first phase to build, own and operate the coal-fired power plant.

The total capacity of the proposed plant will be 2,640 MW with another 1,320 MW will be added in the next phase.

Addressing the media later, Sandeep Reddy, Managing Director, Gayatri Projects, said that 75 per cent of the funds (Rs. 5,151 crore) for the first phase would be raised through debt financing and the balance by shareholders' equity. Financial closure was expected to be achieved by mid-June. He said that Rural Electrification Corporation (REC), Power Finance Corporation (PFC), LIC and several banks were extending debt for the project.

Tang Kin Fei, Sembcorp Group President, said that his company would look for opportunities in India in relation to its core capabilities of energy, water and marine sectors.

Speaking at the agreement signing ceremony, Mr. Shinde emphasised the need for India to have bigger capacity additions to bridge the huge supply-demand gap in electricity. With only half of the planned 42,000 MW added during the X Plan, he said correctives had been taken and expressed confidence in achieving the target of 78,000 MW in XI Plan. He said the per capita consumption was expected to increase from 800 to 1000 kilowatt hours by 2012.

Mr. Rosaiah said Andhra Pradesh was looking for huge investments in power and other sectors and urged Mr. Shinde to expedite clearances to projects from the State.

T. Subbirami Reddy, MP, lauded the efforts of Mr. Shinde in revolutionising the power sector. He stressed the need for Government's encouragement to set up new industries in a bid to provide more employment.

G. V. Krishna Reddy, Chairman GVK Group, pointed out that power was critical for the growth of the economy and said that Mr. Shinde was keen to ensure that the supply-demand gap was bridged.