AV Birla group ventures into eco-friendly power project

By Our Special Correspondent

MUMBAI, NOV. 27. The Aditya Birla group today announced a 450 MW green power project to be set up at Mangalore in Karnataka, at an estimated cost of Rs. 2,300 crores.

``For the group, power is a core business in which it aims to attain a significant position, through growing in revenues and earnings,'' stated a press release issued by the Aditya Birla group. To take the project forward, the group has formed an energy development company. The project report is slated for completion in the next six months.

This project envisages producing electricity in an environmentally compatible process, based on an integrated gassification combined cycle technology. The 450 MW power, so generated will be supplied to the State electricity grid.

Mangalore Refinery and Petrochemicals (MRPL), an Aditya Birla joint venture, is to provide the refinery residue which is basically via broken tar as feedstock for the power plant. According to the release, Mangalore faces a piquant situation in that there is no availability of natural gas or domestic coal. ``Importing coal or using liquid fuel is not cost efficient. So MRPL will supply the refinery residue,'' it added.

The technology for the project would be accessed through Texaco, an oil major and a leader in ICCC technology.

The evolution of this green power project will be two phased. In the first phase, a detailed project report will be prepared. This would establish the techno-commercial feasibility of the project. and frame the invitations to bid for the project contracts, configuring the technologically best and most cost effective option also forms part of this phase. ``As a consequence of these studies, the project team would be able to offer the best tariff to the Government of Karnataka,'' the release stated.

The detailed project report entails a cost of Rs. 10 crores. To partly meet with these development costs, the Power Development Company has received a U.S. TDA grant of Rs. 5 crores. The U.S. TDA is a U.S. Government agency, which promotes participation of U.S. companies in overseas projects, by aiding companies in sourcing technology, equipment and equity. In this project, U.S. TDA's interest stems on account of the key role that Texaco would be playing.

In the second phase, financial closure on the basis of the payment support mechanism evolved by the Karnataka Government is key to the project's onward progress. The release stated, ``After this is achieved, within 36 months, the plant will be commissioned. The commissioning time will be speeded up as this project is at an advantageous position, given that adequate land is available in close proximity to the refinery, facilitating the transfer of residue through direct pipelines from the refinery to the plant.'' None of the Aditya Birla group companies will be investing in this project.

The Aditya Birla group further stated that given that Karnataka was currently severely power deficient, this project assumes special significance. By the year 2006-2007, the estimated deficit is energy availability has been pegged at 15,444 million kWh, which is equivalent to an installed capacity of 3,272 MW.

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