Tata Power Company Ltd on Monday announced that the acquisition of the Coastal Gujarat Power Ltd, a Special Purpose Vehicle (SPV) formed for Mundra Ultra Mega Power Project (UMPP). A formal execution of the documents took place between Power Finance Corporation (PFC) and Tata Power, under the auspices of Ministry of Power, Delhi.
The signing of the Share Purchase agreement, Escrow agreement, Hypothecation agreement, and Port Service agreements, by PFC, bankers, procurers and Tata Power, now allows the Company to go ahead with the various project development activities. A performance bank guarantee of Rs 3bn was provided by the Company in favour of PFC.
Coastal Gujarat Power Ltd has also signed Power Purchase Agreements (PPAs) with seven procurers (distribution licensees) for the sale of contracted capacity and supply of 4000 MW electricity to these licensees but it delineates responsibility of procurers and Company for the next important milestone. It also nominates Gujarat Distribution Company as the lead procurer on behalf of all procurers.
Speaking on the occasion Prasad Menon, Managing Director of the Company said “This acquisition is a significant milestone towards progress on Mundra Ultra Mega Power Project. We continue to look forward to the support of Ministry of Power and Government of Gujarat for all necessary clearances required for the project”.
This development follows the recent announcement made by the Company for acquisition of 30% equity stakes (the “Purchase”) in two major Indonesian thermal coal producers, PT Kaltim Prima Coal (“KPC”) and PT Arutmin Indonesia (“Arutmin”) (together the “Coal Companies”), as well as related trading Companies owned by PT Bumi Resources Tbk (“Bumi”) The acquisition specifically addresses fuel requirements for Mundra UMPP, Trombay and coastal power project in Maharashtra and is complimentary and supports the assumptions made in the bid for Mundra UMPP.
The Government of India had announced the implementation of several Ultra Mega Power Projects through an International Competitive Bidding process and is the largest ever bid based project initiative to be executed in India as well as abroad. The Company had submitted its Expression of Interest for four UMPPS (out of four, bidding process for the two UMPPs is still pending).
Subsequently, the Company won the bid for Mundra Ultra Mega Power Project in Gujarat at a levelized tariff of Rs 2.26/unit. The project is expected to commission its first Unit in 11th plan.
Source : India Infoline