PFC, REC sign pact to finance 1,320 MW coal-fired power plant in Bihar

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26 Aug, 2025 12:21

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Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) on October 19 signed a Memorandum of Loan Agreement (MoA) with SJVN Thermal Private Ltd (STPL) to finance the 1,320 MW coal-based Buxar Thermal Power Plant (BTPP) in Bihar, even as its project cost increased by at least Rs 1,733 crore in over three years.

The power plant, though not a new announcement, signifies India’s continued reliance on coal for power generation despite the government simultaneously having big-ticket renewable energy plans. To meet its peak power demand which is increasing by about 11 percent annually, coal-fired electricity constitutes about 75 percent of the total power mix that is used for consumption as of now. This is despite the fact that India has already exceeded its target of having 40 percent of installed power capacity in the form of renewable energy.

Senior power ministry officials said the Buxar plant will require 4.976 million tonnes of coal annually for which long-term coal linkage has been approved by the coal ministry.

When Prime Minister Narendra Modi laid the foundation stone of BTPP on March 9, 2019, the estimated cost of the project was Rs. 10,439.09 crore, which now has increased to Rs 12,172.74 crore with a debt requirement of Rs 8520.92 crore. As per the MoA, the debt requirement shall be financed by REC and PFC. The Cabinet Committee on Economic Affairs, chaired by PM Modi, had given its approval to the project on March 7, 2019.

The coal-based TPP to be commissioned in Buxar district’s Chausa village will have two units of 660 MW each. It is a greenfield project designed on supercritical technology and is expected to improve the deficit power scenario in Bihar and the eastern region. The Bihar government has already signed a Power Purchase Agreement (PPA) for supply of not less than 85 percent of the generated power from BTPP.

After foraying into hydropower projects, this is STPL’s first project of building a thermal power plant. The BTPP is likely to be commissioned by 2024.

Another coal-based TPP of 1,320 MW is coming up at Khurja in Uttar Pradesh. This plant also is being built on supercritical technology.

Supercritical technology based TPPs use running water as a supercritical fluid - neither gas nor liquid. It is a process which reduces the amount of coal required to heat the same amount of water, while also increasing the plant’s thermal efficiency.