The Letter of Intent for the two projects was given to the two companies in presence of Power Minister Sushilkumar Shinde and Planning Commission Deputy Chairman Montek Singh Ahluwalia in New Delhi.
Lanco and Tata Power had emerged the lowest bidders for the two 4,000 MW projects, to be set up in Madhya Pradesh and Gujarat, at a total investment of up to Rs 40,000 crore (Rs 400 billion).
The Lanco-Globoleq combine had quoted a tariff of Rs 1.196 per unit to outbid nine other companies for the coal pithead-based Sasan project in Madhya Pradesh. The project would require an investment of Rs 16,000-19,000 crore (Rs 160-190 billion).
The Sasan project is likely to achieve financial closure by December 2007 and the first unit would start generation by 2011-12. The company is likely to execute the project in a debt-equity ratio of 80:20 and may raise funds through external commercial borrowings. It is also talking to China's Dongfang Electric for procuring equipment, officials said.
Tata Power had outsmarted five rivals with a tariff of Rs 2.26 per unit for the imported coal-based Mundra project and generation from first unit is likely to start by 2011-12.
PFC is also expected to award two more projects in Andhra Pradesh and Jharkhand, by April-May 2007.
