ESSAR ENERGY, part of the conglomerate Essar Group, has signed a deal to buy Indian power project, Navabharat Power.
Under the deal, the Indian owned company will initially acquire 76 per cent of Navabharat’s equity.
The remaining 24 per cent will be purchased after a number of project milestones are completed, said Essar Energy.
Navabharat is a coal-fuelled power plant being set up in Orissa, an eastern Indian state, which has the capability of generating 2,250 megawatts of energy.
Naresh Nayyar, Essar Energy chief executive said: “This acquisition is in line with the plans announced at the time of our initial public offering and will keep us on track to develop over 11,000 megawatt of power capacity by the end of 2014, thereby maintaining our leading position in the private sector power generation market in India.”
The project is being implemented in two phases, with an expected cost of $2bn (£1.3bn), with the first phase at 1,050 megawatts and the second phase at 1,200 megawatts.
Essar Energy said that proceeds from its May IPO included the equity contribution for the project.