New Delhi: In a major boost for NTPC, the government Thursday decided to re-allocate three coal blocks, that could fire 8,500 MW electricity generation capacity, to the country's largest power producer.
The decision to re-allocate the coal mines -- Chatti-Bariatu, Kerandari and Chatti-Bariatu (South) -- comes at a time when the state-run NTPC is grappling with fuel shortages that are hurting its electricity generation.
Cabinet Thursday decided to give back the three coal mines to NTPC, sources said. These blocks were de-allocated by the Coal Ministry citing long delay by the company in developing them.
According to sources, these coal mines have an annual production capacity of 13 million tonnes.
"The three coal blocks can help in generate about 8,500 MW of electricity," Power Secretary P Uma Shankar said. However, he did not disclose specific details.
These mines were earlier allocated for NTPC's upcoming projects including 1,200 MW Barh II in Bihar.
The development comes on a day when the government cleared sale of its 9.5 percent stake in NTPC, a move that could fetch the exchequer as much as Rs 13,000 crore.
Further, the re-allocation of coal blocks would push higher the company's the overall valuation. This in turn would help the government to get higher returns from the proposed share sale, sources said.
The government holds 84.5 percent stake in NTPC, a Maharatna company. The disinvestment would help NTPC to comply with the minimum public shareholding norms.
At present, NTPC has an installed generation capacity of 39,674 MW.