MUMBAI, Aug 17: The Power Finance Corporation (PFC) has agreed to provide Rs 450 crore to the Maharashtra State Electricity board to part-fund the expansions of the 420 mw power project in Kaperkheda, Maharashtra. MSEB is doubling capacity of the project by setting up two units of 210 mw each.

The expansion of the coal-fired power station will cost around Rs 1,250 crore. The balance Rs 800 crore is likely to be pumped in by MSEB through internal accruals.

The board has tied up with BHEL for the supply of equipment, including the 210 mw turbines, said the sources. However, the price details and payment terms are still not known.

The Kaperkheda power plant presently operates two units of 210 mw each. The new units three and four will be commissioned in about three years though additional generation may start earlier. MSEB was initially in negotiations with Kotak Mahindra Finance to arrange funds for the power plant expansion. However, the proposal is still pending with the government of Maharashtra.

If the government permits the board to fund its projects through term loans from private sources, the money may be used for other power projects. MSEB needs finance to expand the 60 mw Paras power project and has decided to put up a 210 mw unit at the same site. This expansion will cost around Rs 700 crore, said sources.

According to them, if private funding is tied up, MSEB can use its resources for those projects for which arranging finance is difficult.

In its endeavour to enhance power generation in the state, MSEB has decided to act quickly in augmenting the capacity of existing plants like Paras, Kaperkheda and Chandrapur. The plans for Kaperkheda are finalised and construction will begin next week.

Observers say it is more cost-effective to increase capacities at existing plants rather than set up new ones. Besides, the supply of additional power to the grid is possible with some improvement in the transmission system. Plants at new sites also need separate transmission linkages to the state grid.The state has a total installed capacity of 11,582 mw which includes generation from hydel, thermal and nuclear power plants.

It has already cleared three big projects, including the ongoing 2,450 mw project of the Dabhol Power Company, the proposed 1,082 mw coal-fired Bhadravati project of the Ispat group and the 410 mw liquid fuel-based plant to be set up at Patalganga, Maharashtra.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.