The power arm of the Tata group is planning to invest this amount in ongoing as well as new projects. These investments will also be channellised into acquisitions as well as joint venture projects.

Apart from the projects in hand, the company is evaluating new power generation projects and is keenly following the privatisation initiatives undertaken by the state electricity boards.

The company's plans come after the recent Electricity Act, 2003, opened up new opportunities in the power sector by allowing open access in transmission, and the promise of open access in distribution.

"The company is well placed to benefit from the opportunities arising and has drawn up plans to tap them," Tata Power has stated in the notice convening the annual general meeting on June 18, 2004. Recently, however, the Centre said the Electricity Act, 2003 was being reviewed.

The bulk of the company's investments of Rs 1,628 crore (Rs 16.28 billion) may go into the construction of a 330 Mw hydro-based power project at Shrinagar in Uttaranchal, which is being implemented by a 100 per cent arm, the Alaknanda Hydro Power Company.

The company has obtained the major clearances for this and the project is scheduled to be completed by 2008.

The company has also embarked on the construction of an additional 120 Mw unit at Jojobera, which is likely to be completed by October 2005. The company already has an existing 307.5 Mw power plant at Jojobera. The company has also applied for parallel distribution licences for distributing power in seven areas of the Maharashtra State Electricity Board, which are contiguous to its licensed area in Mumbai. These are Bhandup, Navi Mumbai, Khopoli, Lonavla, Pune (urban), Nasik and Kalyan-Dombivili-Ambernath.

Tata Power's expansion plans comes in the wake of Reliance Energy's decision to set up a 3,740 mw gas-based power project at Dadri in Uttar Pradesh at an investment of around Rs 11,000 crore (Rs 110 billion). Further, a host of India's leading corporate houses like Reliance, Essar and the Adani groups have lined up plans for power trading.