Coal India, IL&FS to form jt venture
February 20, 2008
Coal India Ltd and IL&FS Infrastructure Development Corporation Ltd. (IL&FS IDC) today entered into a memorandum of agreement (MoA) to float a 50:50 joint venture to undertake project development for mine, power and other coal based projects. ILFS IDC is a wholly owned subsidiary of investment banker IL&FS.
According to a CIL press release, CIL and IL&FS IDC today inked pact for forming a SPV - Integrated Power & Coal Development Company Pvt. Ltd. (INTEC) – to undertake the projects. CIL and IL&FS will contribute towards building the project development funds of Rs 10 crore for every project under INTEC.
Apart from taking a lead role in promoting public-private partnership in development of difficult mines, introduction of latest technology in development of underground mines, INTEC will also play a lead role in development of pit-head coal-based power plants in select mines.
Low cost power from pithead-based power plants would substantially reduce the input electricity cost of CIL and its subsidiary companies as well as maximize the value realization to CIL.
The joint venture will also explore the opportunities of third party development of coal mines allotted to private and state sector, gainful utilization of washery rejects in development of power projects, coal-bed methane coal gasification.
On the cards are exploring the business opportunities in offering specialized financial advisory services to coal mining sector.
“Focused approach in project development with the objective of maximization of value, along with identification and mitigation of project related risks, facilitation of clearances and other statutory activities will bring down the implementation time of projects,” the release adds.