BECL to invest Rs 2,500 cr in Bhavnagar thermal project

Virendra Pandit / Business Line bureau

Gandhinagar, March 16

The State-promoted Bhavnagar Energy Company Ltd (BECL) will invest nearly Rs 2,500 crore in the next two years for setting up a 500-MW thermal power plant in Bhavnagar district of Gujarat, a company official said today.

BECL, a joint venture incorporated in July 2007, was promoted by State PSUs such as Gujarat Power Corporation Ltd (GPCL), Gujarat State Investments Ltd (GSIL), Gujarat Mineral Development Corporation Ltd (GMDC), Gujarat Industries Power Company Ltd (GIPCL), Gujarat Alkalies and Chemicals Ltd (GACL), Gujarat Narmada Valley Fertilizers Company Ltd (GNFC) and Gujarat State Fertilizers and Chemicals Ltd (GSFC).

They had signed a joint venture agreement in 2008 and signed an MoU with the State Government during the Vibrant Gujarat Global Investors' Summit 2009, an official told Business Line here. The authorised share capital of BECL is Rs 250 crore, divided into 25 crore equity shares of Rs 10 each, whereas the paid-up share capital is Rs 25 crore.

BECL would be funding the project through debt and equity.

It has not yet made a decision on approaching the capital market to mop up funds through an IPO.

BECL is setting up two units of 250 MW each at the plant, which would be pit-head lignite-based, in village Padwa in Ghogha taluka, 25 km from Bhavnagar.

GMDC, which has been granted exclusive rights to mine and market lignite in Gujarat, will be providing lignite for the plant which would be run on circulating fluidised bed technology.

The company has already invited tenders for commencement of major civil and construction works and work is likely to begin in the next couple of months.

The project is expected to be completed in the next two years.