ENRON JOINS BECHTEL, GE CAPITAL IN PACT TO BUILD INDIAN POWER PLANT

ENRON JOINS BECHTEL, GE CAPITAL IN PACT TO BUILD INDIAN POWER PLANT

Enron Corp., Bechtel Enterprises and GE Capital, have signed an agreement to build a $2.5 billion power plant in India.

The group has signed a deal with India's Maharashtra State Electricity Board to build a 2,015-megawatt power plant in Dabhol, India, about 100 miles south of Bombay.The plant will be built in two phases, Enron officials said. The first phase will be a $900 million, 695-megawatt plant.

Company officials hope to begin construction on that phase sometime next year, with the plant expected to begin commercial operation in 1997.

But even before the first phase is completed, the group will begin work on the second segment, with plans to pump in another $1.6 billion to provide an additional 1,320 megawatts of power.

Initially, the plant will burn fuel oil. But by the end of the second phase of the project, the partners plan to switch over to liquefied natural gas.

Enron, which will develop and operate the plant, holds an 80 percent stake in the project. Both Bechtel, which will design and construct the plant, and General Electric, which will supply the plant equipment, have a 10 percent share.

Enron is seeking financing to reduce its interest in the project to 50 percent by the end of the first phase and 30 percent when the project has been completed.

Enron officials plan to raise up to $135 million for the initial phase and $225 million to $250 million overall.

Enron is negotiating to acquire enough liquefied natural gas to supply the operation.

Enron announced last month that it had been chosen by the government of Yemen to help that country export 5.5 million tons of liquefied natural gas annually, a project with an estimated price tag of $5 billion.

The Dabhol power plant is the first electric generating plant the Indian government has approved for development by foreign investors.

India liberalized its foreign ownership laws in this industrial sector two years ago.