Lanco Infra tying up funds for three power projects

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Lanco Infratech is set to achieve financial closure for at least three major coal-fired power projects entailing total investments of over Rs 15,000 crore.

These include the Amarkantak expansion Phase II, Mahanadi and Babandh.

"We expect to achieve financial closure for these projects in 3-8 months, latest by June 2010. These would take 36-48 months to implement from the zero date of achieving financial closure," Venkatesh Babu, Managing Director, Lanco Infratech, said.

Venkatesh Babu told Business Line, "many hurdles faced by independent power producers (IPPs) are now behind us. This will enable more projects to close finances within next 6-12 months."

"The company's capacity will go up to 2,100 MW by March 2010 from 520 MW now leading to significant cash inflows," he said.

Asked if this would mean fresh QIP (qualified institutional placement) offer given the buoyancy in the market, Venkatesh Babu said, "we recently raised about USD 150 million through a QIP issue. We don't see ourselves immediately raising funds, though we could do so as and when required."

"Next fiscal, cash inflows will go up as more power projects get commissioned. In addition, as we take up implementation of these three coal-based projects, the cash required from our side would be Rs 400-500 crore a year, which would come from internal accruals," he said

At the Chhattisgarh-based Amarkantak Phase I of 300 MW is operational and the second unit of 300 MW would be ready by March 2010. Phase II will add 1,320 MW (660x2), taking the capacity there to 1920 MW.

At Babandh, in Orissa, Lanco has planned a 2,640 MW project. Of this, the first phase would generate 1,320 MW (660x2). The third project at Mahanadi in Maharashtra (1,320 MW) was bagged through a competitive bid.

The Babandh project, located near a rail line close to Paradip port, would be commissioned within 48 months from achieving financial closure.

The company is to commission the first unit of the Udupi power project near Mangalore by March 2010 and the second within six months thereafter.

KONDAPALLI Expansion

The company is testing the first phase of the Kondapalli expansion project following gas supplies from the Krishna-Godavari basin. The 240 MW unit of the 368 MW expansion would be synchronised shortly, Babu said.

Taken from Business Line