Anil Dhirubhai Ambani Group likely to invest Rs 400 billion to set up an 8,000 MW power plant in Gujarat

The Anil Dhirubhai Ambani Group (ADAG) is likely to invest Rs40,000 crore to set up an 8,000 MW power plant in Gujarat. Group chairman Anil Ambani is expected to make an announcement in this regard at the Vibrant Gujarat Global Investors’ Summit (VGGIS) in January 2011.

Highly placed sources in the state government said that the ADAG power company, Reliance Power, had submitted a proposal for setting up an 8,000 MW power plant near Bharuch or Dahej. The company has indicated that it proposes to invest around Rs40,000 crore for the project, the sources said.The company submitted the proposal recently to the energy & petrochemical department and the industry & mines department of the state government, the sources added.“The company intends to set up the gas-based power plant in two phases,” a source said. “In the first phase, it will build a plant of 4,000 MW capacity and, in the second phase, it will add another 4,000 MW capacity to the plant.’’

The source further said that, a few days back, Reliance Industries chairman Mukesh Ambani had told his company’s shareholders that his firm will supply gas to ADAG plants as and when they are ready. This, of course, is subject to the allocation made by the government. The Gujarat State Petroleum Corp (GSPC) and the Oil and Natural Gas Corporation (ONGC) are also likely to commit gas supply to ADAG’s power plants, the source said. The group is also likely to shift its proposed power project at Dadri in Uttar Pradesh because of delay caused by local opposition, sources said.

“The Supreme Court ruled last month that the government alone had the right to approve the price of the gas produced from fields such as KG-D6 of Mukesh Ambani’s Reliance Industries and determine its users,” another source said.“After that, ADAG informally approached the Union oil ministry for approving allocation of gas to its proposed power plants. These include the 7,800 MW unit at Dadri in UP and other projects including those in Gujarat.’’

The state government has assured ADAG many incentives and infrastructural support to set up power plants in Gujarat. These incentives would be as per the Power Generation Policy announced in January 2009 to attract power projects to the state.Incidentally, Anil Ambani has consistently attended the Vibrant Gujarat investors’ summits in Gujarat but this is the first time he has proposed such a big investment in the state.