I M Thapar group company Karam Chand Thapar & Brothers (Coal Sales) Ltd is eyeing medium-sized hydel power projects in Arunachal Pradesh and Himachal Pradesh as part of the group's move to enter into the power trading and production business.

Vikram Thapar, vice chairman of Karam Chand Thapar & Brothers and managing director of KCT Coal Sales, told Business Standard that entering into power production and trading was the logical extension of the expertise that the group has in the field.

"Our company is engaged in power projects since the last 32 years. So it is just the application of the knowledge that we have gathered over the years," he said.

The group is now engaged in the Tehri dam project in Uttaranchal. "It is a Rs 700-odd crore contract for tunneling and other activities," he said.

Thapar said the group was looking at hydel projects in Uttaranchal too.

He said that the company is primarily looking at 150 mw run-of-the-river hydel projects in Arunachal and Himachal.

The group felt there was huge potential in these two Himalayan states.  According to in-house estimates, 150 mw hydel projects in states such as Arunachal would cost around Rs 750 crore (Rs 7.5 billion) and the project would recover investments in just 3-4 years.

"Arunachal is going to be the power hub of India. We are ready to explore the potential. A lot of mega hydel projects are coming in that state. The production cost is also very low and with low interest rate regime this is extremely attractive proposition. We are looking at run of the river projects because that is more environment friendly than dams," Thapar added.