SRM Energy Ltd part of India’s Spice Energy Group plans to import 5 million tonnes of coal a year starting 2014 for a USD 2 billion power plant.

Mr D Sundararajan chief executive of the company said that the 2,000 megawatt facility, to be built in the southern Indian state of Tamil Nadu, will burn as much as 8 million tonnes of coal a year of which 70% will be imported.

He said that “We have tied up coal from Indonesia but we are receiving offers for African coal as well.” He added that “The company has a long-term contract for the supply of Indonesian coal, which would be at a discount to market price.”

India, Asia’s fastest-growing major economy behind China, is burning more of the fuel as economic expansion raises demand. The government has pledged to provide electricity nationwide by 2012. The country needs to increase installed capacity to 200,000 megawatts to sustain economic growth, according to the power ministry.

More than half of the current capacity of 167,278 megawatts is fueled by coal.

(Sourced from Bloomberg)