Tata Power Ltd is looking at the possibility of setting up a power plant in West Bengal and has also decided to enter the distribution sector in the state.
Its joint venture with Damodar Valley Corporation has also been finalised with DVC agreeing to a 49 per cent stake, while TPL would be holding the majority.
TPL managing director Firdose Vandrevala said, "We have firmed up plans of entering power distribution in West Bengal which would be followed by a backward integration to a power plant."
"We would initiate talks with concerned authorities such as the electricity regulatory commission and the state government soon. Details of the power plant whether it would be gas or coal-based, however, needs to be firmed up. The size of the plant is also to be firmed up," he explained.
Sources close to the development said the company was considering a 250 mw plant but that, however, was just one of the options. A 250-mw plant would require an investment of Rs 1,000 crore (Rs 10 billion) going by the industry standard.
The issue of majority stake holding in Maithon Power Ltd, which was hanging fire because of reluctance on both sides to be a minority partner, which, according to TPL, has recently been solved.
Tata power was, however, keen on participating in the project and there has also been considerable progress on the 1000 mw, Rs 4,000 crore (Rs 40 billion) Maithon Right Bank power project.
Tata Power has also gone to the extent of asking for three coal blocks with 300 million tonne of reserve from the coal ministry in Jharkhand. The allotment of block has been cleared by the Central Electricity Authority, the state government and the ministry of power.
Clearance from ministry of coal is pending. Coal from blocks would be used for consumption in the Maithon power plant as well as its Jojobera plant. Tatas were initially offered 45 per cent of the equity of MPL -- the stake that Reliance-owned BSES agreed to hold.
The Tata group company was roped in after BSES pulled out from the project a few months back.
It was originally conceived at a debt equity ratio of 70:30 -- with the promoters putting in Rs 1,200 crore (Rs 12 billion) collectively.
