AP govt in Rs 13,000-cr power deal

HYDERABAD: The government-owned AP Power Generation Corporation (APGenco) and Infrastructure Leasing and Financial Services (IL&FS) have entered into an MoU for preparatory project development work for setting up two power projects totaling 3,700 mw at a cost of Rs 13,000 crore.

The projects, a 2,100 mwgas-based combined cycle project between Hyderabad and Karimnagar and a 1,600 mw project at Krishnapatnam in Nellore district, will be taken up on a fast track basis.

APGenco and IL&FS have formed a special purpose vehicle, the AP Power Development Company Ltd, for the two projects, a government statement said.

APGenco has posed the two projects for funding to the Rural Electrification Corporation, PFC and the German KFW which has shown interest, its managing director, Ajay Jain, said.

While 80% of the funding will be through debt, APGenco is looking to offer part of the 20% equity to financial institutions, he added.

The project development activities would be completed within six to seven months and it is expected that the zero date for the gas-based project would be in July, 2006. The first module of the project is to be commissioned by July, 2008.

Similarly, the Krishnapatnam project preparation will be completed by November this year and the first module will be commissioned in a period of 36 months thereafter. The project will be scaled up to 4000 MW subsequently.

The SPV will undertake development of the projects including site selection, land acquisition and securing clearances, while APGENCO would carry out the actual implementation, Jain added.