The cost of the project as appraised by IFCI, has been estimated at Rs 1,481 crore with a debt component of Rs 1,013 crore. The company has already received the sanction letter from the FIs for the major debt requirement of the project.

Global power major Enron had earlier reached an agreement on terms to purchase approximately 49 per cent equity in Ispat Energy. The company has already started civil construction work at the project site and expects to commission the plant by 2002.

Ispat's current energy requirement is met by the state grid. The company's total energy requirement after the entire three million tonne hot-rolled coil project is ready will be 280mw during peak time. A major portion of the power is consumed by the electric arc furnace. The plant configuration comprises a second hand power plant of 55mw and a new plant of 312mw, both being supplied by ABB. Both plants are capable of using blast furnace gas.

The blast furnace was commissioned recently. However, the main fuel for the plant will be LNG, which will be supplied by Enron. Enron Energy Marketing Services, a wholly-owned subsidiary of Enron Corp, has signed a gas sales agreement (GSA) whereby the company will supply natural gas to Ispat Energy's captive power plant. Under the terms of the GSA, Enron will supply 0.2 million tons per annum of LNG over a 20-year period to Ispat Energy. The gas deliveries are expected to commence in the third quarter of 2002. Gas will be transported from the LNG-processing terminal at Dabhol via pipeline to Ispat's plant in Dolvi. Metropolis Gas, a wholly-owned subsidiary of Enron, is currently developing the pipeline.