BS reported that Indian Metals & Ferro Alloys Ltd is planning to spend INR 6600 crore over the next five years to set up a 1,320 MW power plant in Orissa.

With this, IMFA, which currently produces power for its own captive use as a part of its backward integration strategy, will become a commercial power generator.

Mr Subhrakant Panda MD of Indian Metals & Ferro Alloys told Business Standard that “We have proposed the government set up a 1,320 MW independent power plant, with two units of 660 Mw each. This will be done through a special purpose vehicle fully owned by IMFA, called Utkal Power Ltd.”

He added that “We would have sufficient cash flows to fund the entire equity ourselves. But as a de risking exercise, we may consider some fund raising at the subsidiary level in future for the plan, which is at a preliminary stage at present.”

Mr Panda further added that “We will have some surplus power from the three captive units in the short term, which will be sold to the grid. But in the long-term, as we add more furnace capacity, we would use up the entire captive power ourselves. But the entire production from the 1,320 MW plant would be sold in the market.”

IMFA produced 180,000 tonnes of ferrochrome in 2010-11 from five of its six arc furnaces at Cuttack and Choudwar in Orissa. It operates 108 MW captive power generation capacity, as electricity accounts for 40% of the cost of production. It would expand its captive power capacity to 258 MW by March 2012.

(Sourced from BS)