SPV soon for Vedanta’s mega aluminium park in Odisha

BHUBANESWAR: Amid the buzz over Vedanta Ltd’s Rs 25,000 crore investment plan in Odisha, the group is all set to set up an aluminium park at Jharsuguda. A special purpose vehicle (SPV) would be created for development of the park at an investment of Rs 400 crore.

The park, initially approved by the State level single window clearance authority (SLSWCA) in 2010, was reportedly delayed due to land hurdles as a majority of the proposed land was dense forest. Sources said the Industrial Infrastructure Development Corporation (Idco) has identified an alternate site beyond dense forest at a distance of around five km from the smelter unit of Vedanta at Jharsuguda and accordingly Vedanta Limited has agreed to set up the park on the new location.

“Of the 257.17 acre of land initially proposed by Vedanta for the park, around 191 acre is dense forest and not feasible. This is the reason the proposal could not materialise. Another patch of land has been identified by the Jharsuguda administration to which both Idco and Vedanta have agreed,” said an official of Idco. 

The aluminium park will be set up by a SPV incorporated jointly by Idco and Vedanta Ltd in which both would contribute equity. While Idco has decided to contribute the equity in the form of land for setting up the park, Vedanta will contribute the initial equity for incorporation of the SPV and other funds for its development. The SPV would source funds from other sources including term loans. Additional project cost, if any, will be facilitated though term loan taken by the SPV.

Vedanta expects that the proposed aluminium park would envisage an economic value addition of around Rs 4,500 crore per year to the State with exchequer contribution of around Rs 2,721 crore.   The facility will benefit small and medium downstream enterprises, which can set up their manufacturing units and draw hot metal from Vedanta’s aluminium smelter to make their end-products.

The company has committed to supply 3 lakh metric tonne of molten aluminium (hot metal) to the downstream industries who shall set up their facilities in the proposed aluminium park. The proposed project would create around one lakh livelihood opportunities and outreach to more than four lakh people.