GMR Energy has signed the Memorandum of Agreement with Arunachal Pradesh government  for implementation, operation and maintenance of 160 MW Talong hydro power project on River Kemeng in Seppa district on BOOT basis.

The project, estimated to cost Rs.900 crore, will be funded through a 70 per cent debt component and the balance through equity.

DPR for this project has already been prepared and the project has also received first stage of environmental clearance from the Union Ministry of Environment & Forests. Construction work is likely to begin by 2008 and is scheduled to be commissioned by end 2011.

As per the terms of the MoA, the company will offer 14 per cent of free power to Arunachal and an additional two paise per KWH. The company has also offered 12 per cent of equity to the state in the hydro power company. Arunachal also has the right to purchase power from the project over and above free power availed by it.

The other power projects of the company are:

• 200 MW LSHS power plant in Chennai which commenced commercial operation in 1999.
• 220 MW naphtha based power plant in Mangalore which commenced commercial operation in 2001.
• 388.5 MW gas based power plant in Vemagiri (Andhra Pradesh) which has been recently completed.
• 140 MW hydroelectric power plant on the river Alaknanda in Uttaranchal which is under development.