This is the company's second such project and confirms its diversification into power generation and trading activity. Kribhco's first power JV, a 1,000 mw project in association with the Chhattisgarh State Electricity Board (CSEB), is on track. As in the case of the Chhattisgarh project, Kribhco will hold 51 per cent in the second project also.

Along with Iffco, Kribhco is one of the country's major profit-making fertiliser manufacturer. "All that I can say is that we are making efforts to move into power trading as part of our diversification plans. While the Chhattisgarh plans are on track, the Bihar effort is still at a nebulous stage. We have shown interest and the Bihar government is ready to support us," Kribhco Managing Director B D Sinha said.

Around 1,000 acres will be required for setting up the power plant. Kribhco is also moving into other businesses such as setting up a jetty at its Hazira power plant and has entered into a tie-up with the Railways for container services.

Sinha said, "These are part of our future expansion and diversification programmes across the country."

The projected will be funded mainly through loans from banks and financial institutions. Formation of a special purpose vehicle could also be on the cards for the Bihar venture. Kribhco authorities have also initiated dialogues with Power Trading Corporation for their foray into power selling.