IOC to invest Rs 500 cr in 73.8 mw wind projects
New Delhi 17-Nov-2011

Cash-crunch is not stopping India’s largest oil marketing company IndianOil (IOC) to diversify into other energy verticals. After foraying into wind power generation in 2009, IOC is now spending about Rs 500 crore in present financial year to set up 73.8 mega watt new wind farms in Andhra Pradesh and Tamil Nadu.

“The company has given contracts to set up wind power projects of 48.3 mw and 25.5 mw, totaling 73.8 mw, in Andhra Pradesh and Tamil Nadu that would cost Rs 263.47 crore and Rs 151.25 crore, respectively,” said a company official who did not wish to be named.

IOC has reported net loss of Rs 7,485 crore during July-September this financial year. The company has been complaining to government on rising under-recoveries on account of selling petroleum products below market cost. This is leading to tight cash flows in the company and borrowings have skyrocketed.

When asked about funding of new wind power projects, the official said, “Budget provision has been made for project expenditure of Rs 350 crore in 2011-12. The provision will be enhanced appropriately in the revised estimate of 2011-12.”

IOC has awarded contract for 48.3-mw project in Andhra Pradesh to Suzlon Energy. Another contract for 25.5 mw wind farm in Tamil Nadu has been bagged by Leitner Shriram Manufacturing. These contractors have been selected by bidding process on highest returns basis. The projects would be implemented on lump sum turnkey (LSTK) contract model.

The power generated from these wind energy projects would be sold to state power utilities in Andhra Pradesh and Tamil Nadu through 20 years power purchase agreements (PPA).

These two projects on standalone basis would give an internal rate of return (IRR) of 6.61 per cent for Andhra Pradesh and 6.10 per cent for Tamil Nadu, without considering clean development mechanism (CDM).

Wind power projects are eligible for benefits under the clean development mechanism projects. However, IOC is not able to get CDM benefit for its existing Gujarat wind power plant set up in 2009.

In addition to Andhra Pradesh and Tamil Nadu, IOC also invited expressions of interests for setting up of wind farms in Gujarat, Rajasthan and Karnataka in August 2010. However, no bid was received for Karnataka. And the bidder for Gujarat did not offer site for verification and therefore not considered. The bid received for Rajasthan was not found economical.

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The term User shall refer to the user who is browsing the site. The term IndianOil shall refer to Indian Oil Corporation Limited. The term Site refers to www.iocl.com owned and monitored by IndianOil.
By using the Site, you agree to follow and be bound by the following terms and conditions concerning your use of the Site. IndianOil may revise the Terms of Use at any time without notice to you. Areas of the Site may have different terms of use posted. If there is a conflict between the Terms of Use and terms of use posted for a specific area of the Site, the latter shall have precedence with respect to your use of that area of the Site.
ndianOil may terminate User's access at any time for any reason. The provisions regarding to disclaimer of warranty, accuracy of information, and indemnification shall survive such termination. IndianOil may monitor access to the Site.
All content present on this site is the exclusive property of IndianOil. The software, text, images, graphics, video and audio used on this site belong to IndianOil. No material from this site may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from IndianOil. All rights not expressly granted herein are reserved. Unauthorized use of the materials appearing on this site may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. IndianOil is a registered trademark of Indian Oil Corporation Ltd. This trademark may not be used in any manner without prior written consent from IndianOil.
IndianOil does not make any warranties, express or implied, including, without limitation, those of merchantability and fitness for a particular purpose, with respect to any information, data, statements or products made available on the Site.
The Site, and all content, materials, information, software, products and services provided on the Site, are provided on an "as is" and "as available" basis. IndianOil expressly disclaims all warranties of any kind, whether express or implied, including, but not limited to, the implied warranties of merchantability, fitness for a particular purpose and non-infringement.
IndianOil shall have no responsibility for any damage to User's computer system or loss of data that results from the download of any content, materials, information from the Site.
IndianOil may change or discontinue any aspect of its website at any time, including, its content or features. IndianOil reserves the right to change the terms and conditions applicable to use of the Site. Such changes shall be effective immediately upon notice, which shall be placed on the Site.
In no event will IndianOil be liable for damages of any kind, including without limitation, direct, incidental or consequential damages (including, but not limited to, damages for lost profits, business interruption and loss of programs or information) arising out of the use of or inability to use IndianOil's website, or any information provided on the website, or in the Products any claim attributable to errors, omissions or other inaccuracies in the Product or interpretations thereof. Some jurisdictions do not allow the limitation or exclusion of liability. Accordingly, some of the above limitations may not apply to the User.
User agrees to indemnify, defend and hold IndianOil harmless from and against all losses, expenses, damages and costs, including reasonable attorneys' fees, arising out of or relating to any misuse by the User of the content and services provided on the Site.
The information contained in the Site has been obtained from sources believed to be reliable. IndianOil disclaims all warranties as to the accuracy, completeness or adequacy of such information.
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