Tata Power is currently doing a due-diligence for setting up a 1,000 mega watt power plant in Rajasthan, said Tata group executives. The company's plan is contingent on the availability of lignite, to be used as fuel.
It is estimated that the required investment for the 1,000 mw power plant will be around Rs 4,000 crore (Rs 40 billion). Tata Power executives were unavailable for comments.
The company's plans are dependent on the Rajasthan government's commitment to purchase a certain quantity of power from the unit with adequate security mechanisms.
The move from Tata Power to look at the desert state comes after the chief minister's invitation for investment in the state. Other sources said that the company is looking to ensure appropriate fuel linkages are in place prior to firming up the plans.
Tata Power, India's largest private sector power producer, currently has an installed generation capacity of 2,203 mw with units in Mumbai (1,797 mw capacity), Jojobera in Jharkhand (308 mw), Belgaum in Karnataka (81 mw) and Ahmednagar in Maharashtra (17 mw).
The company is currently implementing a 120 mw power plant at Jojobera. This is expected to be fully operational by October. The power generated will be sold directly to Power Trading Corporation, North Delhi Power and other consumers.
The Rs 350 crore (Rs 3.5 billion) project will augment the total installed capacity at the Jojobera power plant to 427.5 mw. Tata Power acquired the 330 mw Shrinagar Hydro Power Project in Uttaranchal last year.
The Rs 1,650 crore (Rs 16.5 billion) project will significantly augment electricity supply to the northern region and is scheduled for completion in 2008. The company is in the process of setting up a 1,000 mw coal-fired power project in Vile, Maharashtra, for which clearances are awaited.
Tata Power has in principle agreed to partner with Damodar Valley Corporation for the proposed 1,000 mw right bank thermal power project being developed by Maithon Power.
Tata Power is also looking at setting up a power plant in Bangladesh. This would mark its debut abroad. The Tata Group has signed a letter of intent with the Bangladesh government for setting up power plants.
The company is exploring to set up a 1,000 mw gas-based power plant in Bangladesh.