Larsen & Toubro Ltd India’s biggest engineering company, may borrow as much as $4.4 billion to build a power-generation business and is considering buying coalmines in Australia and Indonesia to gain fuel supplies.
Larsen’s utility unit may use debt to finance 80 percent of the($5.5 billion) needed to build 5000 MW of thermal power capacity,
“Larsen hasn’t formally announced plans for funding power projects,” Ivan Palacios, Singapore-based analyst at Moody’s, said by telephone today. “Moody’s will assess the impact on the rating once there is clarity regarding their plans for funding.”
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Power generation companies in India plan to almost double capacity in the five years to March 2012.
L&T Power plans to use so-called supercritical technology to build its projects to cut sulfur and nitrogen oxide emissions, he said.
The government plans to auction a total of nine ultra mega power projects, each of which can meet the electricity needs of 1 million middle-income Indian homes. Four have already been auctioned.
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