India's GEMAC Energy to Develop Domestic Power Projects with China's SEPCO-III

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Researched by Industrial Info Resources (Sugar Land, Texas)--GEMAC Energy Limited (GEL) (Chennai, Tamil Nadu), a service provider to India's power generation sector and a part of the GEMAC Group (Chennai), has secured three engineering, procurement and construction (EPC) contracts for setting up power plants in Tamil Nadu and Gujarat. GEL has a partnership with leading global EPC contractor Shandong Electric Power Construction Corporation III (SEPCO-III) (Shandong, China), and the two companies will jointly implement the contracts when the project promoters achieve financial closure.

Of the two EPC contracts for projects in Gujarat, one is being backed by the UROK Group (Rajkot, Gujarat), which is promoted by businessman Dr. Subhash Shihora. The UROK Group has signed an agreement with the state government of Gujarat, whereby the company will set up a 1,320-MW, coal-based power plant near the Pipavav port, in the state's Sourashtra region. The estimated investment outlay for the project is more than $1.7 billion. The UROK Group has already secured clearance for 750 acres of land, and plant operations are set to begin within 42 months of obtaining financial closure, with 2015 set as the tentative date for the completion of the first phase. The power plant will operate on imported coal to be sourced from Indonesia. Talks are under way to secure coal supplies from South Africa. The power plant is estimated to require 8 million tons per year of coal.

The second project in Gujarat has been proposed by the Kaneria Group (Rajkot, Gujarat) and involves an investment outlay of more than $429 million. The 500-MW, gas-based power project will be set up near the city of Surat. The land for the project already has been acquired, and the principle clearance for allocation of gas has been obtained. The group is expected to achieve financial closure within a year, and the first phase of construction is set to begin by 2013, or 24 months after obtaining financial closure. The Kaneria Group will source the required gas from the Krishna Godavari basin in Andhra Pradesh.

The third EPC contract is for a 270-MW circulating fluidized-bed combustion power project near Kumbakonam in Tamil Nadu. An as yet undisclosed Tamil Nadu-based business group is backing the project.

Chairman K. Tirupathi and CEO Kishore Arcot of GEMAC said that the company has a collaborative agreement with Chinese power producer GCL-Poly Energy Holdings (HKG:3800) (Hong Kong), which will provide operations and maintenance services to the power projects, besides obtaining spare parts from China.

Under a separate agreement, GEMAC and SEPCO-III are setting up a 1,320-MW, coal-based, supercritical thermal power plant near Sirkazhi, in the Nagapattinam district of Tamil Nadu. The project cost estimate is upward of $1.3 billion. The first 660-MW unit is scheduled to begin operations within three years, and the second unit within five years. About 80% of the project funds will be acquired through bank loans, 10% through promoters' equity, and the remaining 10% will be financed with private equity. All the supercritical power equipment would be sourced from China.

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