The Maharashtra cabinet granted in-principle approval for setting up two more 660 MW coal-based supercritical units at the Koradi Thermal Power Station.
The state cabinet also approved the raising of equity capital to the extent of 20 per cent of the cost of the project once it gets the go-ahead from Maharashtra Electricity Regulatory Commission (MERC).
The project would be developed in phases with the work on the first unit of 660 MW scheduled to be completed in 45 months.
The second unit is expected to be completed in 51 months from the date of commencement of work.
State-run Maharashtra State Generation Company (Mahagenco) is likely to raise funds partly by debt, which is to the extent of 80 per cent of the cost, and partly through equity to fund the project.
Currently, four old units of 115 MW each are shut and there are plans to dismantle them and build new facilities there.
Energy minister Chandrashekhar Bawankule emphasised the need for the project saying power demand was growing due to industrialisation and the development of infrastructure in the state.
As per statistics, demand for electricity had peaked up to 25000 MW, which is the highest so far, and it is expected to grow to 27000 MW by 2023-24.
"Today the state is free of load shedding as we have a surplus. However, to ensure uninterrupted power supply in future as well, it is important to scale up capacity," he said.Considering the current demand, the state is likely to face a deficit of over 2000 MW by 2023-24, he added.