India's leading conglomerate, Videocon Industries Limited (BSE:511389) (Aurangabad, Maharashtra), has announced plans to set up power plants in the country with a combined generating capability of 5,000 megawatts (MW). V.N. Dhoot, the chairman of Videocon Industries, indicated that the power projects would be in Maharashtra, Chhattisgarh, West Bengal and Gujarat. Videocon is expected to utilize its internal accruals to fund the power projects.
The company will set up a 1,200-MW power-generating facility at Pipavav in Gujarat. The equipment order for the plant has been placed with engineering and manufacturing company Bharat Heavy Electricals Limited (BHEL) (New Delhi) and is expected to be delivered shortly. Project officials said that the power plant is likely to commence operations in the next 30 months. Land acquisition has been completed and capacity expansion is also in the cards. Dhoot indicated that funding arrangements for $1.34 billion have been completed with banks. A power purchase agreement involving all of the power generated has been signed with Tata Power Limited (Mumbai). The Pipavav project will receive coal feed from Videocon's coal mines in Indonesia, which have estimated reserves of 200 million tons. There are plans to acquire new mines and coal linkages in Indonesia. The company is also holding discussions to acquire additional land to increase the capacity of the Pipavav plant by another 1,200 MW.
The state government of Gujarat has extended full support to independent power producers setting up projects near Pipavav port. The power plants are expected to augment traffic in the port and the export terminal. The port has nearly 400 hectares of land that can be used for expansion projects. The port also has 200,000 square meters of coal yard. Sources indicate that the operating power plants will assist in the construction of steel, cement, food processing, and packaging industries in the region.
Videocon Industries is also exploring the possibility of setting up a 1,000-MW thermal power project in Punjab. V.N. Dhoot is expected to meet Punjab Chief Minister Prakash Singh Badal in the next 10 days to discuss infrastructure and investment opportunities. The company also will construct 1,200 MW of power projects in the states of West Bengal, Maharashtra and Chhattisgarh. While land acquisition has been completed for the project in Maharashtra, the project in West Bengal is likely to move slowly.
The 1,200-MW power generating facility in West Bengal is part of Videocon's proposed $4.69 billion, 3 million-ton-per-year steel plant at Durgapur. The project made little progress in the last two years and the company has indicated that it will defer the power plant construction until coal block allocation procedures are completed.
The $2.5 billion Videocon Industries has business interests spanning color picture tubes; gas production; display and imaging products; oil and gas; and consumer durables. The group holds a 25% exploration and production stake in the Rawa oil fields, which are in the Krishna-Godavari Basin on the eastern coast of India. Currently, the oil fields yield about 50,000 barrels per day of oil. The state-owned Oil and Natural Gas Corporation Limited (ONGC) (New Delhi) and minerals, oil and gas company Cairn India Limited (Gurgaon, Haryana) are the other stakeholders in the project. Videocon is also performing oil exploration activities in Australia, East Timor, Brazil and Mozambique.
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