Tata Power Company (Tata Power) announced the signing of the Shareholders' Agreement and the Share Purchase Agreement with Damodar Valley Corporation (DVC) for the proposed mega power plant of 1000 MW Right Bank Thermal Power Project being developed by Maithon Power. Tata Power will hold 74 per cent equity in the venture, with the Government of India established Damodar Valley Corporation holding 26 per cent equity. The estimated capital cost of the project is around Rs 3,800 crore and will be funded through a 70:30 debt to equity ratio. Tata Power will contribute approx. Rs 840 crore to the equity corpus, with DVC contributing about Rs 300 crore.

DVC has already acquired a significant portion of the required land for the project. The financial closure is targeted around June 2006. As per current plans, the project will comprise of two generating units of which the commissioning of the first unit is scheduled for September 2009 and that of the second unit by March 2010. Other requirements of the project are also being pursued.

Adi Engineer, Head — Tata Power, said, "As India's largest private power sector utility, we believe that joint co-operation with the government is essential in meeting the targeted demand for power in the country. This joint initiative marks our first foray into a generation pact with the government. It may be recalled that our successful joint ventures have been with NDPL in distribution and the 400 kV Bhutan to Delhi (Tala) transmission project in transmission sector."

The Maithon Power Project:
The Maithon Power Project is a mega power plant of 1000 MW, green field coal based generation project located at Maithon in the state of Jharkhand. The site is about 250 km from Jamshedpur and Ranchi and 25 km from Asansol. The site is well connected by National Highway 2 and is also located on the rail network of Howrah - Mugal Sarai grand cord line of Eastern Railways. The total land required for the project is about 1,200 acres and currently a significant portion of the land has been acquired by DVC. Other requirements of the project are also being pursued. In addition to supplying power to DVC, the project will also supply power to some of the states in the north of India like Delhi, Rajasthan and Haryana.

About Tata Power:
The Tata Power Company is India's largest private sector power producer with an installed generation capacity of over 2200 MW. The company has emerged as a pioneer in the Indian power sector, with a track record of performance, customer care and sustained growth. Tata Power has a presence in all the segments of the power sector viz generation (thermal, hydro, solar and wind), transmission and distribution.

About Damodar Valley Corporation (DVC):
DVC came into existence on the July 7, 1948 by an Act of Central legislature, as the first multipurpose river valley project of independent India. The members of the Corporation are represented from the central government, West Bengal government and the Jharkhand government. DVC has over the years prioritised generation, transmission and distribution of power not only within its command area in Jharkhand and West Bengal states but also in exporting to other power-deficit states while retaining its priorities in other function viz — irrigation, flood control, soil conservation, etc within its command area. DVC is also instrumental in both capacity addition and rural electrification programmes of the Ministry of Power, Government of India.