Jaypee Group, L&T ink Rs 4,000-crore deal

Jaiprakash Power Ventures Ltd (JPVL), promoted by the $7-billion Jaypee group, has signed a Rs 4,000-crore agreement with Larsen & Toubro Ltd, the engineering and construction major, for supply of equipment for its Nigrie Super Thermal Power Project in Madhya Pradesh.

Under the agreement, L&T will supply two units of 660 Mw each for the power plant.

While the order for boilers for the plant has been given to L&T-MHI Boilers Pvt Ltd (LMBPL), the order for turbine and generators has been given to L&T which will source the equipment from L&T-MHI Turbine Generators Pvt Ltd (LMTGPL). Both LMBPL and LMTGPL are joint ventures between L&T and Mitsubishi Heavy Industries of Japan.

"We will be investing Rs 8,000 crore in this power project. The financial closure has already been achieved, with ICICI Bank as the lead financial institution," said Manoj Gaur, Executive Chairman, Jaiprakash Associates Ltd.

Coal for the plant will be sourced from two captive coal blocks – Amelia (North) and Dongri Tal II – owned by a joint venture of Jaypee Group with the Madhya Pradesh State Mining Corporation Ltd (MPSMCL). The first 660 Mw unit of the power project is expected to be commissioned in April 2013 and the other unit would be commissioned in September same year. The power plant, when operational, will generate over 10 billion units of power annually.

The Jaypee Group has a current operational power generation capacity of over 900 Mw and plans to add another 2,000 Mw capacity by the end of the current Plan period ended March 2012.

"We want to take our total capacity to over 13,470 Mw, with a 60:40 mix of thermal and hydro in less than seven years from now," Gaur said.

This is the second order bagged by L&T in the supercritical segment in India after it won the order for supplying a 1,600 Mw turbine generator from the Andhra Pradesh Power Development Corporation earlier.

The company plans to set up around 4,000 Mw of domestic power equipment manufacturing capacity by 2010.