REC, PFC Ink Pact To Finance 1320 MW Coal-fired Buxar Power Plant In Bihar

The two state-run power financiers, REC Limited and Power Finance Corporation Limited (PFC) have signed a Memorandum of Loan Agreement with SJVN Thermal Private Ltd. (STPL) for financing 2x660 MW coal based Buxar Thermal Power Plant (BTPP).

SJVN Thermal Private Ltd., a wholly owned subsidiary of SJVN Ltd., a Mini Ratna CPSU under administrative control of the Ministry of Power, is implementing the 1320 MW Buxar Thermal Power Project in village Chausa in Buxar district of Bihar.

The 2x660 MW coal based Buxar Thermal Power Plant is a green field project designed on supercritical technology and equipped with latest emission control technology to protect the environment.

The Buxar TPP will improve the deficit power scenario in Bihar and Eastern region of the country.

The Bihar Government has already signed Power Purchase Agreement (PPA) for supply of at-least 85% of power generated to the state which will not only reduce demand supply deficit of Bihar in terms of current power scenario but will also boost industrial activity in the state.

Coal Linkage

The annual coal requirement of 4,976 million tonnes per annum was to be initially sourced from Deocha-Pachami Dewanganj-Harisingha coal block, in Birbhum district of West Bengal.

However, the Ministry of Coal in 2018 replaced the allotment and long-term coal linage was granted to the project though Central Coal Fields.

Commissioning by 2024

The Foundation Stone of the Buxar Thermal Power Plant was laid by Prime Minister Narendra Modi on 9 March 2019.

The Power business of Larsen & Toubro (L&T) was awarded a mega engineering, procurement and construction (EPC) order to set up the Buxar Plant in June 2019.

While, more than 50 per cent of works related to the first unit have already been completed, the work of the second unit was virtually inaugurated in November 2021.

On commissioning, the plant will generate 9,828 Million Units of electricity. According to the current schedule, the first unit of Plant is to be commissioned by June 2023 and second unit by January 2024. 

Increased cost

The Cabinet Committee on Economic Affairs, chaired by PM Modi, had given its approval to the project on March 7, 2019.

At the time, the estimated cost of the project was Rs 10,439.09 crore, which now has increased to Rs 12,172.74 crore with a debt requirement of Rs 8,520.92 crore. 

The net increase in project cost has been by at least Rs 1,733 crore in over three years. As per the MoA, the debt requirement shall be financed by REC and PFC.