BHEL to ink alliance pact with Mahagenco today

Government-owned power equipment major Bharat Heavy Electricals (BHEL) is set to sign memorandum of understanding (MoU) with Maharashtra State Power Generation Company (Mahagenco) – belonging to the Maharashtra government – today. The two partners are expected to hold an equal stake in the joint venture (JV), which will set up a 1,500 MW supercritical thermal power plant at Latur in the state at a cost of around Rs 7,000 crore.

The project envisages setting up of two 660 MW coal-fired thermal units. The JV will also look at the option of setting up a 1500 MW gas-based power unit in the absence of adequate coal linkage.

The power from the proposed plant will be sold only in Maharashtra at rates to be determined by the state electricity regulatory commission. BHEL will reserve the right to exit after commencement of commercial operations. Mahagenco has an installed capacity of around 10,000 MW at present and plans to add nearly 3,000 MW by 2012.

The proposed JV will be BHEL’s third such initiative with state power utilities. The power equipment major had set up JVs with Karnataka and Tamil Nadu power generation firms with a 26% stake each in these ventures. It is in the process of signing similar pacts with Madhya Pradesh and Gujarat for power generation projects.