A senior company official said BSAL has already short-listed the partner and the talks were at an advance stage. A formal decision to this effect will be taken in the next couple of weeks. The Karnataka Government on Saturday had cleared the power project involving an initial outlay of Rs 250 crore.

Declining to name the strategic partner, the official said: ``The partner, which will offer operation and maintenance services to the 60 mw coal-based power project coming at Bellary in Karnataka, will inject about Rs 30 crore as the equity, while about Rs 45 crore will be invested by us.''

For the balance funds, Bellary Power Industries is looking at both the banks and financial institutions. Industry experts said that since the group's steel project is already facing severe cash crunch, the settingup of a power venture is not viable for the company at this juncture. ``But the decision to form a joint venture is likely to help the company for raising funds for the power venture,'' they added.

The official told The Indian Express that Bellary Power Industries will sell a part of the power generated at this plant to its parent company which is setting up a 5 lakh tonne per annum steel facility. ``The company will also be offering about 15 mw of power to the Karnataka Electricity Board for which the company will enter into a buyback arrangement,'' he added.

It is believed that the power firm also had preliminary discussions with some leading companies in Bellary to supply the balance power. However, the preliminary discussions did not materialise due to the pricing factor and the company finally decided to provide power to the KEB. In fact, earlier Bellary Steels and Alloys had planned to set up a 12 mw captive power plant for augmenting the power availability.