Initially, the project will function on an open cycle basis and in the second phase, it will be put into combined cycle mode. During this period, the power company will install another gas turbine of 43 mw, heat recovery steam generator and a steam turbine to upgrade the capacity to 165 mw, said company officials.

The project is being jointly developed by BSES Kerala Power Ltd (BKPL) and Kerala State Industrial Development Corporation (KSIDC). BKPL, a subsidiary of BSES, has joined hands with KSIDC for strategic partnership.

Entire output form the project will be supplied to the Kerala State Electricity Board(KSEB) with which the PPA has already been signed, officials said.

As per the agreement, KSEB, will make payment through letter of credit. It has also provided an escrow account facility to the power company. Apart form this, the state government has given a payment guarantee in case the electricity board fails to service the escrow account.

The fuel supply agreement has been signed with the IOC which will provide naphtha for the plant. The plant is part of the short-gestation projects planned earlier to meet the immediate requirement of the grid. The company was given the fuel linkage by the state from its share of liquid fuel provided by the Centre. Due to the limited availability of naphtha, Centre had decided to allocate fuel up to 12,000 mw amongst various states having small power plants. The plant has also been given priority for all clearences because Planning Commission originally identified it as a model project to be set up by the state government. Subsequently the state invited global bidsthrough which BSES was selected.