Essar Power to acquire 2,250 MW Navabharat Power project in Orissa

UK-listed Essar Energy said yesterday that its subsidiary Essar Power (EPL) would acquire Navbharat Power - a 2,250-MW coal-fuelled power plant under implementation in Dhenkanal, Orissa. It did not disclose the financial terms

To start with EPL will take up 76 per cent of the existing equity, with the balance 24 per cent to be acquired on the completion of certain project milestones. The project outlay is estimated at $2 billion, with implementation in two phases of 1,050 MW and 1,200 MW.

Navbharat Power, is a joint venture between Malaxmi Energy Ventures and Nava Bharat Ventures. The project includes the allocation of 112 MMT of coal from the Rampia block and additionally, 4.7 million MMT coal linkage with Coal India. Land acquisition for the project, which is expected to achieve financial closure by the end of the current year, is currently in progress.

"Navabharat Power is a major part of our power phase II development project. This acquisition is in line with the plans announced at the time of our IPO and will keep us on track to develop over 11,000 MW of power capacity by end-2014," said Naresh Nayyar, CEO, Essar Energy.

According to Nayyar, the first phase of the Navabharat Power project has already received most of the necessary approvals, including environment clearances.

''The next stage of the approval process is expected to save at least two years in execution time compared to a greenfield investment,'' he added.

Essar Power, is part of the Ruias-owned conglomerate which has interests in sectors ranging from telecom to steel.

The company is planning to expand its installed capacity to 6,000 MW by 2012 and is implementing three other coal-based power plants, one each in Gujarat, Madhya Pradesh and Jharkhand.