Larsen & Toubro (L&T) will set up three power plants at a total cost

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of Rs 30,000 crore by 2015. “We have constituted L&T Power Development which will oversee three special purpose vehicles (SPVs) that will set up the coal-based plants,” said AK Chaatwani, L&T’s senior executive vice- president.

The parent company will invest Rs 6,000 crore in the equity of the new company. The remaining Rs 24,000 crore will come from financial institutions and banks. “L&T Infrastructure Finance Company will raise the money for us,” Chaatwani said.

The first of the three plants will come up at Rajpura in Punjab and have a capacity of 1,400 mw. L&T hopes to start generating electricity at the plant by 2014. A separate SPV, called Nabha Power, has been set up for the project.

The SPV has acquired 1,100 acres at Rs 40 lakh an acre from the state government. The price was higher than its fertility would warrant, Chaatwani said. The company has also entered into an agreement with South-Eastern Coalfields to source coal.

“We will finalise the commissioning and power generation targets for all the three plants within six months,” he said.

Rajpura will use supercritical technology, considered the most efficient and least polluting of all coal-based power systems.

Sites for the other two plants have not been decided yet, but the company is scouting for land in Orissa, Jharkhand, Gujarat, Maharashtra and Chattisgarh. In the power sector, L&T has been mainly an equipment supplier. It made its first move into the power generating business recently when it signed a joint venture agreement with Karnataka Power Corporation to set up a 1,600 mw supercritical thermal power project in Bodna in Janjgir-Champa district of Chattisgarh. Work on the project will begin in December.