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The Tata Power Company (TPC) has acquired the Coastal Gujarat Power Limited (CGPL), a special purpose vehicle (SPV) formed for the 4,000-mw Mundra Ultra Mega Power Project (UMPP). A formal execution of the documents took place between Power Finance Corporation (PFC) and TPC, under the auspices of the power ministry. The signing of the share purchase, escrow, hypothecation, and port service agreements, by PFC, bankers, procurers and TPC, now allows the company to go ahead with the various project development activities. As reported by FE last week, a performance bank guarantee of Rs 300 crore was provided by TPC in favour of PFC. The CGPL has also signed power purchase agreements (PPAs) with seven procurers (distribution licensees) for the sale of contracted capacity and supply of 4000 mw of electricity to these licensees but it delineates responsibility of procurers and company for the next important milestone. It also nominated Gujarat Distribution Company as the lead procurer on behalf of all procurers. Speaking on the occasion Prasad Menon, managing director of TPC, said, "This acquisition is a significant milestone towards progress on Mundra UMPP. We continue to look forward to the support of power ministry and the Gujarat government for all necessary clearances required for the project." This development follows the recent announcement made by TPC for acquisition of 30 per cent 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. TPC release said that the centre had announced the implementation of several UMPPs and is the largest ever bid based project initiative to be executed in India as well as abroad. TPC 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 UMPP in Gujarat at a levelised tariff of Rs2.26 / unit. The project is expected to commission its first unit in the 11th plan. |
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