C.P. Jain, chairman and managing director of NTPC, in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, July 22: National Thermal Power Corporation (NTPC) will float Rs 1,300-crore eurobonds in the second half of the current fiscal to meet the capital expenditure required to set up new plants.

Eurobonds are foreign currency bonds that give the issuer the flexibility to choose the country where it wants to raise the money, depending on the regulatory constraints of that country.

NTPC plans a capital expenditure of Rs 8,550 crore in 2005-06. Of this, Rs 2,724 crore will come from internal accruals and another Rs 4,526 crore will be borrowed from banks and financial institutions or through domestic bonds.

?We plan to float eurobonds worth Rs 1,300 crore either in the third or fourth quarter,? said C.P. Jain, chairman and managing director of NTPC.

NTPC has recently signed loan agreements for Rs 500 crore and Rs 200 crore with IDBI Bank and Corporation Bank, respectively, to part-finance its capacity addition programme.

The utility has an ambitious plan of adding 9160 mw in the Tenth Plan and a further addition of 17,000 mw in the Eleventh Plan.

Jain said the construction for generating 9470 mw is under progress. Work for another 2,600 mw (1,300 mw each) from gas projects at Kawas and Jhanor Gandhar will start shortly.

To tide over the coal crisis for its plants, NTPC has decided to set up integrated units. The utility will acquire coal mines and then set up power plants so that the coal linkage is assured.

?We would like to produce 6,000 mw of power through the integrated route in the Eleventh Plan,? Jain added. This will also reduce the cost of production and the consumers can get quality power at a cheaper price.

NTPC has applied to the Union coal ministry for 13-14 mines in the Raigad area in Chhattisgarh and near Talcher.

?The power ministry has approved the proposal and has sent it to the coal ministry,? Jain added. The total cost for developing these mines will be Rs 2,500 crore.

Earlier, NTPC had received the Pakribarwari mine from the coal ministry. It will start developing the mine soon and production will start from 2008.

NTPC is also open to the idea of entering into a joint venture with Coal India Limited for developing mines.

The total coal requirement of NTPC is 107 million tonnes. Coal India supplies nearly 103 million tonnes and the remaining 4 million tonnes has to be imported mainly from Indonesia through MMTC (2.1 million tonnes) and State Trading Corporation (1.9 million tonnes).