IOC-Tata Power Joint Venture to Build 1,000-Megawatt Power Project for Paradip Petroleum Complex

BANGALORE, INDIA--August 1, 2008--Researched by Industrial Info Resources (Sugar Land, Texas)--In a bid to reduce financial and operational risks, Indian Oil Corporation Limited (BOM:530965) (IOC) (Mumbai) will enter into a joint venture with Tata Power (Mumbai) to build a 1,000-megawatt (MW) power plant in Mirthapur in the state of Orissa with an investment of nearly $1 billion. Tata Power will own a majority stake of 74.26% in the project, and IOC will hold the balance. Tata Power and IOC jointly conducted a feasibility study and estimated the tariff for power supply to the Paradip complex at U.S. 6.15 cents per unit on an annual levelized basis for 25 years of operation. Another study conducted with Foster Wheeler (NASDAQ:FWLT) (Clinton, New Jersey) indicated that if IOC were to set up a captive power generation unit within the Paradip complex, the power tariff would be U.S. 12.5 cents per unit. IOC stands to gain from the joint venture by a 50% reduction in power costs.