Dubai-based Coal and Oil Company is planning to set up a 500-Mw coastal thermal power project in the country. It is also considering acquiring a stake in an Indian coalmine.
The locations being considered for the power project are Tuticorin in Tamil Nadu, Karwar in Karnataka and Krishnapattnam in Andhra Pradesh.
The company, which supplies coal to India, plans to start with a 125-Mw unit and may then further ramp it up to 500 Mw.
"The fuel for the project is likely to be sourced from Indonesia, as price fluctuations affect Indonesian coal only after a gap of three months," sources told Business Standard.
The project is likely to have fuel usage of 9,000-10,000 tonnes of coal a day. The first unit of 125 Mw would involve a project cost of Rs 600 crore (Rs 6 billion). Once the plant size is ramped up, the total project cost would be around Rs 2,400 crore (Rs 14 billion), the source added.
The company is also exploring the possibility of picking up stakes in Indian coalmines. It is currently looking at possibilities in Punjab, Rajasthan and Maharashtra. In the international market the company plans to pick up stake in a Vietnamese coalmine with 200,000 tonne capacity.
"It can be through acquisition or a new greenfield project. Indian coal will continue to play an important role for the reasons of supply security and currency risk," president and CEO C&O Company Ahmed Buhari said.
The company also planned to supply coal to the Punjab State Electricity Board, NTPC and Gujarat Urja Vikas Nigam Ltd.
The company is also looking at developments on the coal policy front. "The fuel supply agreement needs to be indexed along with an allowance for variations in the foreign exchange agreement," Buhari added.
The C&O group's turnover for 2004-05 was Rs 1,500 crore (Rs 15 billion) and the company is expecting 10 per cent growth in its turnover for 2005-06. "C&O's main clients in India are Reliance Energy, Torrent Power, Tata Chemicals and Tata Power, state electricity boards and captive generation plants," Buhari said.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group