New Delhi: Reliance Industries announced today (Jan 27, 2004) it would invest Rs 10,000 crore in setting up "the world's largest gas-based power generation plant of 3,500 MW" in Uttar Pradesh.

Dedicating the plan to his late father Dhirubhai Ambani, Anil Ambani, vice chairman of Reliance Industries, said, "The project would be completed in phases with first phase to be completed within three years from starting."

About the tariffs, Ambani said, "Based on current techno-economic parameters of the project it will be possible for us to generate power at roughly Rs 2 per unit."

He said generating power at Rs 2 per unit would be globally competitive. That was possible because the gas would be sourced from Reliance Group's Dhirubhai gas fields in the Krishna Godavari basin, off the coast of Andhra Pradesh, he added.

Asked about the funding of the project, Ambani said the equity portion of the investment would come from internal accruals while the rest of the money would be arranged from a mix of international borrowing and domestic debt.

He said three-four possible locations for the project had been inspected and the company was in talks with UP Government for finalising the site. The project would require up to 2500 acres of land.

Amabani hoped the project would be viable in view of peak shortage in the northern region to the tune of about 2000 MW and 1,250 MW alone in the State.