September 08, 2008

REC to fund revival of GSPC Pipavav power project

It is reported that GSPC Pipavav Power Company Limited has signed a loan agreement with Rural Electrification Corporation Limited to put the 700 MW Pipavav power project back on track. REC would provide a loan of around INR 2,000 crore for the project, which costs INR 2,334 crore.

Mr Saurabh Patel energy & petrochemicals minister of Gujarat said that the Pipavav power project was conceived by the earstwhile Gujarat Electricity Board way back in 1990 based on the Panna Mukta Tapti gas committed by the centre but as the gas allocation was not coming through, the project implementation remained on drawing board only.

Incorporated as a special purpose vehicle by the Gujarat State Petroleum Corporation and the Gujarat Power Corporation with the initial equity, the GPPC will see induction of other equity partners at a later stage.

For the EPC contract, Bharat Heavy Electrical Limited has been issued a letter of intent after a selection through the international bidding route. While the GSPC would arrange for the gas, Gujarat State Petronet Limited would transport the gas required for the power project. Once commissioned by end of 2010, the total electricity generated from the project would be sold to Gujarat Urja Vikas Nigam Ltd to bridge the demand-supply gap of electricity in the state, a company release stated.

Being an environment friendly project as compared with a coal or lignite based power project, the GPPC has also initiated the process to register the project with the United Nations Framework Convention on Climate Change to avail of the carbon credit benefits.