Coal & Oil Group to invest Rs 10k cr in TN

The project which is being developed at a cost of around Rs 6,800 cr by Coastal Energen Pvt Ltd, the power-generating flagship company of the C&O Group
Chennai: Dubai-based Coal & Oil (C&O) Group, building a 1,200-Mw thermal plant in Tuticorin district of Tamil Nadu for Rs 6,800 crore, has said it will invest another Rs 10,000 crore to increase the capacity by 1,600 Mw to 2,800 Mw.

R Venkataramani, vice-president (finance and accounts), said public hearing for the proposed expansion of the Mutiara Thermal Power Plant had been completed and work will start once the existing project completes. The company has about 1,000 acres, good enough for the project as well as its expansion.

Last week, C&O Group said it secured additional funding of around Rs 1,600 crore from a State Bank of India (SBI)-led public sector bank consortium to complete the 1,200-Mw plant, being developed at a cost of around Rs 6,800 crore by Coastal Energen Pvt Ltd, the power-generating flagship company of the C&O Group. The plant has so far obtained Rs 5,200 crore in funding from a consortium led by SBI, said Venkataramani.

Ahmed Buhari, founder and president of the C&O Group, said considering the acute power shortage in Tamil Nadu, the company had committed to supply a large part of its generation to the state grid.

The latest sanction of Rs 1,600 crore will contribute to last-mile funding and address cost escalation due to the recent devaluation of the rupee, among other things. The first phase of the 2x600 Mw power plant is expected to go on stream in June 2014, after a delay of around 12 months. The second phase will commence producing power within four months of the phase-I commissioning date, Buhari added.

The Mutiara plant aims to address the power shortage in the state, which is to the tune of 5,000 Mw. The company has signed a power purchase agreement with the Tamil Nadu Generation and Distribution Corporation for 600 Mw, Buhari said.

The plant will benefit from the proximity to both a major city (Tuticorin) and major port, as well as road, rail and air connectivity. It is currently the first and only mega project that has commenced out of the 30 which were planned in the past 15 years.