CIL Subsidiaries Set to Ignite 2,260 MW

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

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

One of the approved projects is led by South Eastern Coalfields (SECL), which aims to establish a 660 MW TPP through a joint venture with 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, SECL's equity capital 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 has also granted approval to MBPL, a Special Purpose Vehicle (SPV) of MCL, to establish the 1,600 MW Super-Critical TPP.

It's worth noting that the equity investment by CIL's subsidiaries 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 although the equity investment originates from the subsidiaries, it is reported under CIL for accounting and reporting purposes since CIL is the holding company.

News by Rahul Yelligetti