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India

India

Tata Chemicals plans huge Gujarat project

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Tata Chemicals Ltd, one of India's largest chemical companies, is planning a major diversification into non-conventional energy and is aiming to harness wind energy at its 37,000 acre site at Mithapur in Gujarat. The company has floated a tender inviting bids for an initial 50 MW. The Gujarat Electricity Board grid is currently capable of absorbing only about 600 MW of power, though the potential for generation at the site is much larger, says Tata Chemicals director, Manu Seth. "The company is looking for a rate of return in the region of 20%," he adds. Tata Chemicals is working to find innovative long term means of financing the capital intensive project. Among the options is a "structured obligation" debt instrument with high ratings. The Gujarat government continues to offer a sales tax benefit of 50% on equipment cost as an incentive to industry to invest in wind generation. According to Seth this is not the first time Tata has considered using its wind resource. "The first attempt was made in 1962 with cloth turbines, but it failed," he says. The Tata group is also examining the viability of wind turbine production. "If the company decides to build a large wind farm it makes sense to integrate backwards," says Seth.

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