State PCS - Uttar Pradesh (UP PCS)

• 18 Jun 2024

Uttar Pradesh Accelerates Thermal Power Projects

Why in News

The Uttar Pradesh government is accelerating the Ghatampur and Obra C thermal power projects to address the state’s growing energy demand.

Key Points

• The combined capital expenditure (capex) for these projects exceeds Rs 32,000 crore.
• The Ghatampur project (1,980 MW) is estimated to cost Rs 19,006 crore and is being developed by Neyveli Uttar Pradesh Power (NUPPL).
• All three units of the Ghatampur project are expected to be commissioned in 2024-25, with the state receiving 75% of the production of electricity.
• The Obra C thermal power plant (1,320 MW) had a cost overrun due to changes in prices and exchange rates.
  • The state will meet 70% of the augmented cost of Obra through borrowings, while the remaining 30% will be provided through share capital.

Capital Expenditure

• It is incurred with the purpose of increasing assets of a durable nature or of reducing recurring liabilities.
  • Example: The expenditure incurred for constructing new schools or new hospitals. All these are classified as capital expenditure as they lead to creation of new assets.