The public sector Singareni Collieries Company Ltd has achieved financial closure for 1200 MW pit head thermal power project, to be set up in Adilabad district, with the entire debt component of INR 4,000 crore coming from the Power Finance Corporation.

According to Mr S Narsing Rao CMD of SCCL, the company will raise the equity of INR 1,900 crore from internal accruals and partly through additional commercial borrowings.

With the completion of the financial closure the company is confident of completing the project by March 2014. SCCL is negotiating with BHEL for supply and erection of the two super critical thermal units. Mr Rao said that “The company is well positioned in terms of raising the equity capital as it has cash reserves of INR 1,000 crore as on March 31st 2010.”

The company had originally envisaged 500 MW project, mostly for captive purposes, by extracting coal from the abandoned underground mines at Ramakrishnapuram, but later scaled up the project size to two units of 600 MW each. The power project requires 4.6 million tonnes of coal a year while the reserves in the abandoned coal mines is estimated to be around 170 million tonnes.

Mr Rao said that SCCL is planning to use 150 MW of the total installed capacity of this project for captive purposes while giving the remaining 1,050 MW to state power utilities. A draft power purchase agreement to be entered with APTransco is under preparation.

(Sourced from BS)