Neyveli Lignite wants majority stake in power project

May 27th, 2008 - 9:35 pm ICT by admin  

Chennai, May 27 (IANS) Lignite mining-cum-power generation company Neyveli Lignite Corporation (NLC) Limited favours holding 51 percent stake in the proposed 2,000 MW coal-based power project in Orissa, said a top company official. S.Jayaraman, chairman and managing director, told reporters Tuesday: “The mining project will be in joint venture with Mahanadi Coal Fields and Hindalco, while the structure of power project is yet to be finalised.”

He said if the power project is to come up as a joint venture, the NLC would like to hold 51 percent stake.

He added that the Orissa power project will have super critical boilers and technical bids are being evaluated.

With its 600 MW (6×50 MW and 3×100 MW) thermal station I nearing the end of its economic life, the Neyveli Lignite Corporation Limited (NLC) decided to build a 1000 MW (2×500 MW) plant at the same location.

Jayaraman said: “The power plant under went renovation and modernisation programme nearly 15 years ago. The plant load factor (PLF) is slightly over 60 percent. It is time the plant is replaced with higher capacity equipment.”

The work on de-commissioning the thermal station I and the setting up of new plant will start next year.

He said NLC will be adding 500 MW power generation capacity this fiscal - 250 MW each at Neyveli and Rajasthan - thereby taking the total capacity to 2990 MW by the end of this year.

In Rajasthan, NLC is in the process of setting up a lignite mine at an outlay of Rs.2.54 billion and 2×125 MW power project at an outlay of Rs.11.14 billion.

“Another 250 MW at Neyveli will be added next year,” he added.

The other capital projects undertaken by the company include mine II expansion from 10.5 million tonnes per annum (tpa) to 15 million tpa, 500 MW (2×250 MW) thermal power station expansion and 1,000 MW coal-based power project at Tuticorin, Tamil Nadu partnering with Tamil Nadu Electricity Board.

Jayaraman said the company is doing a feasibility study on the Jayamkondan power project, which involves mining and power plant.

The NLC has budgeted a capital expenditure (capex) of Rs.17 billion this year and a similar amount was spent last fiscal.

The company has tied up for finance with a consortium of banks to the tune of Rs.25 billion and a further funding arrangement for Rs.18 billion is being planned to meet the capex needs.

Earlier, announcing the performance of the company for the fiscal FY08, he said the company closed the year with a total income of Rs.36.38 billion and a net profit of Rs.11.01 billion as against Rs.27.05 billion and Rs.5.66 billion posted the previous year.

The company board at its meeting recommended a final dividend of 10 percent taking the total dividend to 20 percent for the year under review.

The company had declared an interim dividend of 10 percent this February.

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