National Thermal Power Corporation has planned backward integration of sorts where it would be setting up thermal power projects near coal mine pitheads, and also undertake development of coal projects. This is being with a view to mitigate coal shortages.

During the XI Plan period, NTPC has planned to set up two power projects linked to mines that can supply 30 million tonnes of coal per year.

The two power projects, coming up at Talcher in Orissa and Raigarh in Chhattisgarh, will have a combined capacity of 6,000 MW. The capital outlay for the power plants would be Rs.25,000 crore while Rs.2,500 crore would be invested in coal mining. 

A proposal for allocation of captive mines had already been forwarded through the power ministry to the coal ministry for approval. NTPC would acquire and rehabilitate the proposed mines, while delivery and despatch of coal would be done through another agency to be selected through an open tendering process.  A joint venture with Coal India in this regard is a possibility.

Capacity Addition Plans: NTPC has planned to add capacity of 9,160 MW in the X Plan period (2002-07) and 17,000 MW in the XI Plan.

For fiscal year 2005-06, a total capital budget of Rs.8,550 crore has been earmarked to be funded by internal accruals (Rs.2,724 crore) and borrowings (Rs.4,526 crore). Borrowings would be in the form of term loan and privately placed bonds. They would also include Euro Bonds worth Rs.1,300 crore to be floated in the last quarter of 2005-06. NTPC has aimed to add 710 MW of power capacity during 2005-06, which would be the lowest in recent years.

During 2004-05, NTPC undertook capital expenditure of Rs.5,297 crore as compared with Rs.4,580 crore in 2003-04. The company added 2,000 MW of fresh capacity during 2004-05, taking its total capacity to 23,749 MW, or around one-fifth of India's total power capacity.

Also See:

NTPC to invest Rs.8,550 crore in FY06 (9-Apr-05)

NTPC to produce 50 million tonnes of coal by 2010 (13-Jun-05)