Lafarge plugs in to captive power sector

Lafarge plugs in to captive power sector
Published: 08 November 2004

Lafarge India (LIPL), a subsidiary of the Lafarge group of France, will be amongst the first foreign investors in the captive power sector in India. The company which grabbed headlines by taking over the cement division of Tisco is now set to acquire 49 per cent equity of a captive power company in Chattisgarh. This would also be the first power venture for Lafarge in India.

Electricity Act 2003 has encouraged captive generation by allowing captive power promoters to sell the surplus power to retail customers or sell it to
the state electricity grid. State electricity boards are expected to allow wheeling of power through their existing transmission infrastructure.

Large private industry players including Reliance, Tatas, Jindals, among others have set up their own captive plants to take care of their electricity requirements.

According to sources, Lafarge is seeking to acquire a stake in Arasmeta Captive Power Company. This company has been set up to promote and develop captive power plants in India. To start with, the company has proposed to develop a 43mW captive power plants in Chattisgarh. LIPL has proposed to invest about Rs 35 crore for acquiring the 49 per cent stake, sources said.

Power tariffs for industrial consumers in India are higher by several notches when compared to domestic consumers. The company believes that a captive power plant will ensure regular and cheaper power supply in the long run.

The Lafarge group through Financeire Lafarge, France holds the entire share capital of Lafarge Holdings India (LHIPL), which in turn is also the
investor holding company. LHIPL later set up an operating company in India in the name of LIPL, which acquired the two cement plants located at
Jajobera (Bihar) and Sonadih (Chattisgarh).