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Informist, Friday, May 30, 2025

KOLKATA – State-owned entities Coal India Ltd. and Damodar Valley Corp. are expected to borrow around INR 115.5 billion over a period to jointly set up a 1,600-megawatt ultra-supercritical thermal power project in Jharkhand. The project consists of two thermal power generation units of 800 megawatts each.

While the project entails around INR 165 billion of investment, which is expected to be done in tranches, the two companies are expected to invest around INR 24.8 billion each from their internal accruals. Damodar Valley Corp. will operate the plant once it is completed, but the ownership will be shared jointly with Coal India, according to Damodar Valley Corp.'s Chairman S. Suresh Kumar.

"Our current debts are around INR 160 billion, which is manageable and we have cash reserves from which we can fund around 15% of the project cost for the Chandrapura project. For the rest of the investment, we will resort to borrowing," Kumar told mediapersons here.

Coal India and Damodar Valley Corp. will form a new entity where both will hold a 50% stake for the expansion project. The project is a brownfield expansion of the existing 500 MW thermal power plant in Chandrapura in Jharkhand, which is operated by Damodar Valley Corp.

Kumar said that since Damodar Valley Corp. has a credit rating of A+ from India Ratings, the interest cost will be optimal. "The rates in the bond market are very high, so we will look favourably at financing options other than bonds," he said.

A Coal India official told Informist that the Maharatna company will also put in 15% of the cost from internal accruals and the rest 70% will be funded jointly from loans.

During 2024-25 (Apr-Mar), Damodar Vally Corp.'s revenue collection was INR 253.2 billion with a monthly average revenue of around INR 21.1 billion.

"This joint venture company is yet to take shape, but we have signed the definitive agreement with Coal India. The letter of award will be finalised this year (by December-end) and construction will begin soon. We plan to commission the brownfield expansion by 2030," Kumar said.

For the current financial year and next, Damodar Valley Corp. has planned a capital investment of around INR 45 billion to scale up its power generation. The upcoming thermal power projects include the 1,600 MW brownfield plant at Koderma in Jharkhand, the 1320 MW second phase of Raghunathpur Thermal Power Station in West Bengal, and the 800 MW greenfield plant in Durgapur in West Bengal. It is also setting up various other solar power projects.

Damodar Valley Corp. currently has an installed thermal power generation capacity of 6,687.2 MW and a rated solar power output capacity of 13.9 MW peak. Megawatt peak is a unit of capacity measurement used in solar power industry which measures the maximum power a solar system can generate, not necessarily the actual power it will produce in real-world conditions.

Coal India is expected to invest around INR 220 billion in the coming few years to set up two power projects in addition to its joint venture with Damodar Valley Corp. The first plant is a 660 MW thermal power plant in Anuppur district of Madhya Pradesh, through a joint venture between Coal India's subsidiary South Eastern Coalfields Ltd. and Madhya Pradesh Power Generating Co. Ltd. The second project is a 1,600 MW supercritical thermal power plant in Sundargarh in Odisha. The Odisha project will be handled by the special purpose vehicle Mahanadi Basin Power Ltd., a wholly-owned subsidiary of Mahanadi Coalfields Ltd., another arm of Coal India. 

Friday, shares of Coal India closed 0.2% lower at INR 397.30 on the National Stock Exchange. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Avishek Rakshit

Edited by Saji George Titus

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