Rural Electrification Corporation Ltd (REC) has signed a memorandum of understanding (MoU) with NTPC Tamil Nadu Energy Company Ltd (NTECL), a joint venture company set up by NTPC and the Tamil Nadu Electricity Board (TNEB), to fund a power project in North Chennai. Pre-commissioning is expected to start in March-April 2011 and both the units are likely to go onstream by December 2011.

NTECL is building a 1,000 MW  (2X500 MW) greenfield power project at Vallur in North Chennai. The phase one of the project entails an investment of Rs 5,423 crore, of which, 30 per cent is being met by equity and balance through debt. REC has sanctioned the entire debt portion of Rs 3,796.48 crore for phase one.

One more unit of 500 MW power plant would come up at the same site with an investment of Rs 3,020 crore, for which REC has sanctioned the entire debt portion of Rs 2,114 crore. The third unit is likely to be operational in November 2012 and TNEB is expected to get 1,125 MW in all.