India's DDKPL Seeks Joint Venture Partner to Construct $1.58 Billion Thermal Power Plant

---

Researched by Industrial Info Resources (Sugar Land, Texas)--The Dada Dhuniwale Khandwa Power Limited (DDKPL), a joint venture company of Madhya Pradesh Power Generation Company Limited (MPPGCL) (Jabalpur) and power equipment manufacturer Bharat Heavy Electricals Limited (BSE:500103) (BHEL) (New Delhi), is seeking a third joint venture partner to construct the 1,600-megawatt (MW) supercritical thermal power project in Khandwa, in central Indian state of Madhya Pradesh. The project is estimated to cost $1.58 billion.

MPPGCL, which is owned by the state government of Madhya Pradesh, has an installed capacity of 3,000 MW and is working with equipment manufacturer BHEL to construct thermal power projects to augment power supplies to industrial projects in the state. A new joint venture agreement between the three partners will stipulate that 65% of power generated by DDKPL will be sold to MP Tradeco, a power trading company of the Madhya Pradesh government, at rates determined by the Madhya Pradesh Electricity Commission, a state-level regulatory body, while the balance will be sold to the national grid. Officials at SAIL said that the third joint venture partner would be given management control and will have to fund 48% of the project through equity contribution.

The pre-conditions proposed by DDKPL are that any bidder for partnership should have implemented any core-sector project in India--like airports, railways, industrial parks and telecom--and experience in operating a power plant with minimum installed capacity of 500 MW. Any prospective partner also would have to agree to a procurement of main plant equipment from BHEL.

As for the current status of the project, BHEL officials said that a draft feasibility report has been submitted by consultants and is being finalized. Application of a coal linkage of 7.9 million tons per year has been submitted to the Indian coal ministry.

BHEL officials said that the DDKPL project is part of the company's strategy to partner state-level power-generating companies, and similar arrangements are being worked out with other state governments like Tamil Nadu, Karnataka and Maharasthra. Targeting a total generating capacity of 8,000 MW through such partnerships with state power generating companies, BHEL will then consider having a separate company exclusively for generation, officials said.

With Maharasthra State Power Generating Company Limited (Mahagenco), BHEL has signed a memorandum of understanding to construct a thermal power plant of seven units of 600 MW on a build, own and operate basis.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.