The fuel will be generated from lignite and the corporation will finance the total equity requirement, which is around 20 per cent. The balance will be raised from debt side, which includes issuing of debentures and tax-free bonds, commercial bank borrowings, IDFC, external suppliers credit and financial institutions.

"Unlike the other independent power producers (IPPs), our project can raise debt based on the strong GMDC balance sheet. We don't have to wait till the completion of the project to repay the loans," Rao added.

"Unlike other power projects developed by private promoters, thenew power project will using the lignite produced by GMDC and is a forward integration," he said, adding that the fuel will be GMDC's lignite from its mines (3200 kcal/kg) and the technology will be environment-friendly CBF combustion. The sea water will be used for cooling. In the Kutch region's sea shore, the corporation has acquired 307 hectares of land for the project and it has placed order for boiler to Alstom of Germany and turbine to Ansaldo of Italy.

Orders have been placed after global bidding in which global power majors like ABB, Skoda, Enaco Mac (Russia) and Bharat Heavvy Electricals Ltd (BHEL) took part. "These two orders account for about 70 per cent of the total foreign exchange cost of the project which is around 45 per cent of Rs 1180 crores. We are not likely to raise forex through External Commercial borrowing route as the exchange rate is high," he added. Going for ECB is risky as the project will not be generating any foreign exchange to take care of the long-term exchange raterisk.

The project has been cleared by Gujarat Pollution Control Board (GPCB) and is awaiting environmental clearance from the union ministry of environment and forests. The project is not in forest or sanctuary area and does not violate the coastal regulation zone, Rao said, adding that a feasibility study has also been carried out by the National Institute for Oceanographic Studies (NIOS).