The development comes close on the heels of the recent deal for 4,000 MW ultra mega project at Sasan by the company. With this, the total capacity of Lanco, both in operation and in process, will go up to about 11,000 MW.

The thermal project would be set up in two phases of 1,320 MW each and the Jharkhand Government would assist the company in acquiring land, permit for required water and provide support infrastructure.

Jharkhand would have the first right of purchase of up to 25 per cent of the power generated and the rest would be sold to any other State through competitive bidding process.

The Chairman of Lanco Infratech, Mr L. Madhusudhan Rao, told Business Line "these are early days and we are in the process of firming up partners and other necessary clearances. Though we have not yet fixed the cost of the project, typically, one MW would cost about Rs 4 crore."

Speaking from New Delhi over phone after receiving Letter of Intent (LoI) for the Sasan Ultra Power Plant, Mr Rao said this new project like the Sasan project would be based on domestic coal. Jharkhand has about 30 per cent of the coal reserves in the country and the coal available there is of high calorific value, with less ash content, hence ideally suited for power generation.

Asked about participating in other ultra mega projects, Mr Rao said the company has qualified for the Krishnapatnam RFQ (request for qualification) stage and would also be interested in other projects.