Jindal Steel and Power Ltd will set up a 1000 MW (250x4 units) power plant, accorded 'mega project' status, in Raigarh entailing an investment of Rs 3,900 crore (Rs 39 billion).

The mega project status would result in a saving of upto Rs 400 crore (Rs 4 billion) by way of exemption in import duty on machinery and excise duty, Navin Jindal, vice chairman and managing director of JSPL, told reporters in New Delhi.

The actual cost of the project stood at Rs 4,300 crore (Rs 43 billion), but the accordance of mega project status was expected to result in tariff reduction to the tune of seven to eigth per cent, he said, adding, "We shall also provide the cheapest power compared to other private producers due to advantage in tariff attached with mega projects."

Jindal said the company has appointed SBI Caps for financial appraisal and a meeting of banks and financial institutions has been convened next week to tie up finances.

The project would be completed in two phases of 500 MW each, he said. Initially, finances would be tied up for 500 MW to the tune of Rs 2,140 crore (Rs 21.40 billion), of which Rs 650 crore (Rs 6.50 billion) would be in equity by Jindals and rest would come through debts.

For the supply of equipment, the company was in talks with various domestic and foreign suppliers including state-owned Bharat Heavy Electricals and Alstom.

The power plant would be set up under the aegis of Jindal Power Ltd, a 100 per cent subsidiary of JSPL.