The Bihar government Saturday signed a memorandum of understanding (MoU) with a Kolkata-based company to set up a thermal power project at a cost of Rs.25 billion in the power-starved state.
The state-owned Bihar State Electricity Board (BSEB) signed the MoU with Vikash Metal and Power Ltd (VMPL) here for setting up a power plant at Barauni in Begusarai district, about 110 km from here.
'We aim to complete the project by 2011 and the power plant is likely to be operational in the same year,' Vikash Patni, managing director of the company, said.
'It will be a small investment but make a difference,' Patni told IANS soon after the memorandum was signed.
The Bihar State Investment Promotion Board has already approved the project while the Bihar Industrial Development Authority has allocated 300 acres of land for setting up the plant.
According to VMPL officials, the company has made a demand for 1,000 acres of land for setting up a 2,000 MW power plant in a phased manner in order to streamline the distribution of power in the state.
Energy Minister Bijendra Prasad Yadav, who was present when the deal was signed, said it was a positive beginning as several big power projects were coming up in the state.
According to energy department officials, the state's own power generation currently is nil. 'We have a demand of 1,500 MW and the state is getting about 800-900 MW from the central government pool,' they said.
The two thermal power plants - at Kanti in Muzaffarpur and Barauni in Begusarai - are being repaired.