NTPC to acquire $7.2B worth of generators

NTPC will place orders for generators worth $7.2 billion by March 31 as it accelerates capacity addition to help reduce blackouts. The utility will buy nine generators of 660 megawatts each and the same number of 800-megawatt units, according to NTPC chairman Arup Roy Choudhury.

NTPC, which failed to meet its capacity addition target in the year ended March 31, aims to speed up construction of plants to meet demand in Asia's second fastest growing major economy. Capacity addition will more than double to 3,150 megawatts this year, with another 5,500 megawatts to follow in the year ending March 2012, Choudhury said.

"One of the biggest concerns for NTPC has been the execution of projects," said Harshad Shukla, an analyst at KR Choksey Shares & Securities Pvt.

With the orders, "NTPC's project execution is expected to move up," he said. NTPC and its ventures have plants that can generate 32,694 megawatts, according to the company's website . The utility is targeting 75,000 megawatts by March 2017.

Companies that win bids to supply the equipment will need to set up local manufacturing units to avoid delays, Choudhury said. Delivery of generators must start within 16 months from the time the orders are placed, he said. NTPC may form a partnership with Nuclear Power Corp. of India to build a plant in Haryana state in the north of the country, Choudhury said. The generator may take a 49 per cent stake in the venture.

India is seeking investments from domestic and overseas companies to increase generation capacity after the government pledged to provide electricity to households nationwide by 2012. The country's installed capacity was 167,278 megawatts at the end of October and the government is targeting an increase to 200,000 megawatts in two years to sustain economic growth of 8 percent, according to the power ministry.