Gayatri to power up state

Foreign investors seem to be warming up to India’s power sector again, after a long gap. Hyderabad based infrastructure firm Gayatri Projects on Tuesday signed an agreement with Singapore’s Sembcorp to set up a 1,320 mw thermal power plant in Krishnapatnam, Andhra Pradesh. The cost of the supercritical power project will be Rs 6,869 crore – which will include an equity investment of Rs 1,718 crore by the two partners. This is the first investment by a foreign firm in India’s power sector in over four years.

Gayatri managing director T V Sandeep Reddy and Sembcorp executive vice-president Tan Cheng Guan signed the JV agreement in the presence of Andhra Pradesh Chief Minister K Rosaiah, Union Power Minister Sushil Kumar Shinde and Rajya Sabha Member T Subbarami Reddy today. “The first phase of the project will be completed in 40 months,” Mr. Reddy said. The next phase of the project involves setting up another 1,320 mw power capaicty, he added. The entire 2,640 mw capacity would be ready in five years time. The project will help meet part of the growing power needs of the state, Mr. Rosaiah said at the event.

"Sembcorp is the first foreign company to invest in the power sector in India in the last four-and-a-half years," Mr. Shinde said, speaking at the occasion. Although 100 per cent FDI is permitted in the power sector, response of foreign investors has been tepid so far, Mr. Shinde said. “But now we have taken many corrective steps to help the power sector grow, which is restoring confidence among foreign investors," he added.

Gayatri Projects will own a 51 per cent stake in the project, while Sembcorp will hold the remainder. The Singapore based firm would be investing Rs 1,100 crore in the project, Gayatri said in a statement. Sembcorp Utilities is a Singapore based firm with interests in power generation and water supply. Temasak Holdings, the investment arm of Singapore Government, owns a 49.7 per cent stake in the firm.