Mumbai: BSES Ltd, a Reliance-controlled company, is weighing options to mobilise funds for the proposed power projects in Andhra Pradesh, Haryana, Karnataka and Maharashtra.

Senior BSES officials say preliminary talks are on with leading financial institutions and banks to mobilise the debt part for these project. The total cost of the projects is estimated at Rs 12,000 crore.

The officials add: "We may go through the traditional fund mobilisation route to finance the projects. Our presentation to various state governments is under way. Once this process is over, we will make presentations to the financial institutions for funding."

The officials say the balance sheet of Reliance Industries will be used to mobilise the funds as BSES''s balance sheet may not provide enough provisions to tap the huge debt required for these projects.

Currently the Mumbai-based power utility is looking at setting up one or maybe two such plants in phases, depending on the demand in the respective states. The officials say the project will be fired by natural gas, which will be sourced from Reliance Industries'' Krishna-Godavari basin gas findings.

The recent gas find on the East Coast, with a capacity of 60 million cubic meters per day, is enough to generate 20,000 MW of power. As per the current plant, BSES will supply electricity to consumers directly through its own distribution company, or sell it to a private distribution company, and not to the cash-strapped state electricity boards (SEBs).

The company had made it clear in its presentations to the state governments that they will have to promote these distribution companies with private sector companies, with at least 51 per cent being held by the private company.

The officials said BSES will not ask the state governments to buy power. "We are not looking at any power purchase agreements. The approach is completely different in the light of the new Electricity Act."

BSES wants the state governments to unbundle their respective SEBs as part of the proposed reform process under the Electricity Act and privatise them in order to make them more accountable and financially sound.

"BSES has made it very clear to the state governments that we will be more comfortable with these distribution companies rather than work with the SEBs," the officials said. BSES has proposed a tariff of Rs 3.25 to Rs 3.50 per unit.