Following is an excerpt from a news report in Livemint.

Infrastructure company, Lanco Infratech Ltd, … plans to set up its largest power generation capacity unit at Baban, Orissa, in an attempt to meet growing demand for power in an economy that is expanding at more than 9% a year.

The plant will have a capacity of 2,640MW and will require an investment of around Rs11,000 crore, said Lagadapati Madhusudhan Rao, chairman of the Lanco Group. It will have four units of 660MW each. “We are setting up this coal-fired power project in Orissa under a special purpose vehicle (SPV), Lanco Baban Power Plant Ltd,” added Rao.

Of the 2,640MW, 25% will be sold to Orissa and the balance will be sold to other buyers through tenders. The company also plans to keep a certain portion for merchant power, Rao said. Merchant power is the term used by power companies to describe power sold in the spot market (as opposed to that sold through long-term contracts).

The company claims to have lined up nearly 75% of its fuel supply arrangements in the form of captive coal and coal linkages. While coal for 1,000MW capacity would come from Rampia coal blocks, near Baban, which was allotted recently by the government, another 660MW will come from Coal India Ltd (CIL).

“We have applied to the Union ministry of coal for additional coal for the balance power capacity. We are expecting financial closure for the project by early 2009,” said Rao.