Surat Lignite Power Plant Expansion Project – Phase II (Unit 3 & 4) has been awarded to M/s.Bharat Heavy Electricals Limited (BHEL) on EPC Contract basis. The project zero date starts from 31st March, 2006 and Unit-3 will start commercial operation by November, 2008 and Unit-4 will start commercial operation from March, 2009. The environment friendly Circulating Fludized Bed Combustion (CFBC) technology will be used for the expansion project also. The project will enable optimum utilization of certain infrastructure already available in the existing power plant.

Along with the power plant expansion project, the company will also develop a new lignite mine adjacent to its existing mine, for which new mining leases and all necessary clearances including environmental clearance have been obtained. The new mines, where the cost of mining is going to be much lower than in the existing one, will reduce the cost of generation even in the existing power plant. The lignite mines of GIPCL have adequate exploitable reserves to support 1000MW generation.

The total cost of power plant and mining project is proposed to be financed on a 75:25 debt-equity ratio.

To mobilize the equity for the project , company came out with follow-on Public Issue of Rs.275 crores through Book Building route out of which Rs.75 crores of equity has been contributed by Promoters by participating in Book Building Process. Balance 200 crores have been mobilized from the market.

The project will be implemented through EPC route. Being an expansion project with a good amount of infrastructure already in place, it is targeted to commission the same by 2009.