MP private power plants fail to take off

BHOPAL, APR 4: No power plant in the private sector in Madhya Pradesh has become operational although memoranda of understanding MoUs w...

BHOPAL, APR 4: No power plant in the private sector in Madhya Pradesh has become operational although memoranda of understanding MoUs were signed with 17 parties from 1993 to 1998 due to absence of escrow guarantee and lack of financial closing by the companies.

Stating this, official sources said today that the state government had till now provided escrow guarantee to only four out of the 17 parties who were supposed to set up power projects but since they went to court, the matter was pending.

Escrow guarantee has been provided to projects based at Pench, Korba east, Bina and Maheshwar. Although the Madhya Pradesh Electricity Board8217;s established capacity was 3814 mw, it could provide only 2850 mw on an average. The state was getting 1370 mw of power from central power projects located in western Madhya Pradesh although as per an agreement they should be supplying 1770 mw.

Madhya Pradesh also purchased electricity from some states and all this totalled 4495 mw against a demand of 5550 mw.

Thestate government had entered into MoUs with private parties to bridge the gap between demand and supply of electricity in Madhya Pradesh, sources said.

They said if all the 17 private parties, with whom MoUs were signed, commenced power production, they would be able to provide around 6800 mw, thus making MP a surplus power state.The MPEB had signed agreements with the 17 parties for purchasing 6562 mw of electricity while the CEA had granted permission for only 5329 mw. MPEB was right now working on two extension projects for the Sanjay Gandhi Birsinghpur power station, both of whom would have a capacity of 210 mw each, sources said.

EEB Adds: IDBI may increase the escrowable capacity of MPEB by 500 MW thus paving way for the 574 MW Bhilai Power project, being promoted by the consortium of SAIL-Lamp;T and PSEG of USA, to secure escrow protection for their project. Sources said that increase in escrowable capacity of MPEB, if done, will be utilised to grant escrow to the Bhilai Power project. Theexisting escrow of 2561 MW of MPEB is currently being utilised to give escrow protection to three coal based projects promoted by Daewoo, Pench and Bina Power respectively.

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In a recent letter addressed to IDBI by the MP government, the state government has stressed on the need of increasing the escrowable capacity by 500 MWs.