New Delhi: Adani Power's wholly-owned subsidiary Mahan Energen Limited (MEL), which recently bagged a big coal block in Chhattisgarh for commercial coal mining, has entered into a 20-year, long-term Power Purchase Agreement (PPA) with Reliance Industries Limited (RIL). The agreement is for the supply of 500 MW of electricity under the captive user policy as defined in the Electricity Rules, 2005, the company said in a regulatory filing on Thursday.
One unit of 600 MW capacity of MEL's thermal power plant, out of its aggregate operating and upcoming capacity of 2,800 MW, will be designated as the captive unit for this purpose, it stated.
In order to avail the benefit of the captive user policy, RIL has to hold a 26 percent ownership in the captive unit in proportion to the total capacity of the power plant. Accordingly, RIL will invest in 5,00,00,000 equity shares of MEL, aggregating to Rs 50 crore, for the proportionate ownership stake.
APL, MEL and RIL have signed an investment agreement on March 27, the filing said, adding that closing of the transaction is subject to customary conditions including receipt of requisite approvals.
In a separate regulatory filing, Adani Power said it has consolidated different short-term loan facilities worth Rs 19,700 crore availed by the company's six special purpose vehicles into a single long-term debt. The revised arrangement will help the company benefit from a uniform tenure and reduce effective interest rate, Adani Power said in a regulatory filing.
The company said the loan consolidation under a consortium financing arrangement comprising eight lenders became possible with the amalgamation of its six special purpose vehicles (SPVs) after the credit rating of Adani Power Limited (APL) was enhanced to AA-.
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