IDFC Project Equity Company Ltd has invested Rs 350 crore in Essar Power Ltd for part financing the equity for its ongoing expansion projects. The funds have been invested from India Infrastructure Fund (IIF) which currently manages a corpus of $900 million. This will be
the funds first investment since its first close in June 2008. An earlier report said that IDFC Project Equity is picking up a 1.5% stake in the firm, which would value the privately-held firm at more than Rs 23,000 crore.
Essar Power, part of the Essar Group, currently operates three power plants – two in Hazira with generating capacity of 515 MW and 500 MW each and one in Vadinar with a capacity of 125 MW. The firm is developing four more projects which include – a project at Salaya in Gujarat, cogeneration power plant at Vadinar in Gujarat, coal pithead project at Mahan, Madhya Pradesh and at Tori in Jharkhand. These projects are to be completed in next 3 years which will take the total capacity of Essar Power 6000 MW.
Tata Power is also looking to divest some equity stake in couple of its ultra mega power project (UMPP). It is reportedly looking to sell stake in 4,000 Mw Mundra UMPP. and Maithon Power, a JV with Damodar Valley Corporation.
“Developing infrastructure projects requires immense ability to absorb shocks and setbacks from time to time which could emanate from credit market conditions, regulatory changes or project execution challenges, more so in the current environment,” said Aditya Aggarwal, Principal,
IDFC Project Equity.