Tata Power Company is planning to acquire the entire 100 per cent equity in ST-CMS Electric Co, one of India's fast-track power projects.

Tata Power Company is now keen on buying out the 50 per cent stake owned by one of the original promoters in ST-CMS Electric -- CMS Energy of the US.

Last week the company had submitted a non-binding bid for the 50 per cent stake held by Swiss multinational ABB and its associate companies in ST-CMS Electric.

"Tata Power has submitted a non-binding bid last week for ABB's equity and is now keen on acquiring CMS Energy's stake as well, if the US-based energy company is prepared to sell," sources familiar with the development said.

Last year, CMS Energy announced its decision to exit India citing lack of clarity in the country's power policy.

ABB, which holds a 50 per cent stake in the company, has put its stake on the block as part of its global decision to sell its equity in various power generation projects globally. ABB took this decision in order to put its finances in order.

CMS Electric Co has set up a 250 mw lignite-based power project at Neyveli in Tamil Nadu. Tata Power is at present on an expansion drive and has submitted a bid for the US-based AES Transpower's 49 per cent stake in the coal-based Ib Valley project in Orissa.

The Rs 3,700 crore (Rs 37 billion) Tata Power has been traditionally strong in setting up coal-based stations and is now keen on pithead plants in order to sell cheap power.

The company has also entered the power trading segment by picking up a 10 per cent stake in the Power Trading Corporation.

ST-CMS Electric Co's 250 mw power project commenced operations in December last year. A power purchase agreement has been linked with the Tamil Nadu Electricity Board, while the fuel-supply agreement is with the Neyveli Lignite Corporation.

The $319 million power project has a debt-equity mix of 2:1. The debt component of $219 million comprises a $174 foreign currency loan and a $45 million rupee loan.