Government Approves ₹5,607 Crore Equity Investment for Establishment of Two Power Plants

In a significant development, the Cabinet Committee on Economic Affairs (CCEA) has given its nod to the proposal for equity investment by two subsidiaries of Coal India (CIL) to establish two pithead thermal power plants (TPPs) with a combined capacity of 2,260 megawatts (MW).

The total equity investment sanctioned by the CCEA for both power plants amounts to ₹5,607 crore, contributing to the overall project cost of ₹21,547 crore.

The approval includes a project led by South Eastern Coalfields (SECL) for the establishment of a 660 MW TPP through a joint venture involving the coal miner and Madhya Pradesh Power Generation Company (MPPGCL).

The second project, spearheaded by Mahanadi Coalfields (MCL), involves setting up a 1,600 MW TPP through Mahanadi Basin Power Ltd (MBPL), a subsidiary of MCL.

According to an official statement, the equity capital for SECL amounts to ₹823 crore, constituting approximately 20% of the total investment, considering a Debt-Equity Ratio of 70:30. Additionally, MCL's equity capital for the proposed 1,500 MW Super-Critical TPP in Sundargarh District, Odisha, is ₹4,784 crore, accounting for around 20% of the estimated project cost of ₹15,947 crore.

The CCEA also granted approval to MBPL, a Special Purpose Vehicle (SPV) of MCL, to establish the 1,600 MW Super-Critical TPP.

The statement further highlighted that the equity investment by CIL will exceed 30% of its net worth in the joint venture of SECL-MPPGCL (₹823 Crore, approximately 20%) and in MBPL, a wholly-owned subsidiary of MCL (₹4,784 Crore, approximately 20%).

An official source clarified that while the equity investment will come from the subsidiaries, it is accounted for under CIL for reporting purposes, given that CIL is the holding company.

HBL