State-run gas group GAIL and the National Thermal Power Corp of India plan to take a stake in the mothballed $2.9 billion Dabhol power plant in order to make it operational before selling it off. The two organisations would invest a total of Rs 10 billion ($230 million) through a special purpose vehicle in a bid to take control of the company’s assets on a 50:50 basis.

Indian banks including state-run Industrial Development Bank of India, State Bank of India and private lender ICICI Bank have lent $1.3 billion to the project.

A further 20 or so overseas creditors have lent about $600 million to the project, including Bank of America Corp, Citigroup and ABN AMRO, although some of this has already been recovered. GE and Bechtel own 86% of the project after buying out the 66% Enron stake last April, while the Maharashtra State Electricity Board owns the remainder. According to sources in India, lenders are aiming to restart the project in 2006.