Tata Power signs generation pact with DVC on Maithon project
March 29, 2005

The Tata Power Company (TPC) announced signing of the MoU with the Damodar Valley Corporation for the proposed 1000 MW Right Bank Thermal Power Project being developed by Maithon Power Ltd. The Tata Power Company Ltd will hold a 74 per cent stake in the venture, with the government-promoted Damodar Valley Corporation (DVC) holding a 26 per cent stake. The agreement is the first initiative in public-private partnership in the area of generation, under the provisions of the Electricity Act 2003.

Tata Power will be entitled to nominate up to seven directors and DVC will be entitled to nominate up to three directors on the board of directors of the company. Tata Power will also be entitled to nominate a chairman and managing director of the company out of its nominee directors.

According to the agreement, prior to financial closure, DVC will have the option to enter into a bankable power purchase agreement with the company, to purchase up to a specified quantum of power, which is to be intimated prior to execution of the shareholders agreement, on such terms acceptable to the respective JV parties and lenders funding the project. Execution of the shareholders agreement is subject to satisfactory due diligence by Tata Power, within six months.

This pact also heralds the company’s first JV with government in generation, after similar successful JVs in distribution with the North Delhi Power Limited (NDPL) and in transmission with the 400 kv Tala transmission project through Powerlinks Transmission Limited and marks the first private entity in the sector to enter into public-private JVs in the three crucial areas of generation, transmission and distribution.

Says FA Vandrevala, managing director of the Tata Power Company Ltd, “This joint venture is a public-private partnership towards meeting the power supply needs of the country. For Tata Power, the venture also marks an initiative towards acquiring a truly national footprint and sourcing power at economic rates for the end consumer. The Agreement marks a successful trend and offers hope for more such joint initiatives for the power sector in the future.”

Maithon Power Limited (MPL)
Maithon Power Project Limited (MPL) is a green field coal-based project located at Maithon in the state of Jharkhand. The site is about 250 kms. from Jamshedpur and Ranchi and 25 km from Asansol. The site is well connected by National Highway 2 and on the rail network through Howrah-Mugalsarai Grand Cord Line of Eastern Railways. The total land required for the project is about 1100 acres and currently about 50 per cent of the land has been acquired progressively, by DVC. The project has all the major permits and clearances, including from the Pollution Control Board and MoEF. Long-term coal linkage has been allotted from BCCL mines and water allocation is from the adjacent Maithon reservoir. Power is to be exported to power deficit western and northern states after meeting the requirements of DVC in terms of a PPA to be executed between TPC & DVC.

About Tata Power
The Tata Power Company Limited is India’s largest private sector power producer with an installed generation capacity of 2200 MW. The Company has emerged as a pioneer in the Indian power sector, with a track record of performance, customer care and sustained growth. Tata Power has a presence in all areas of power sector - generation (thermal, hydro, solar and wind), transmission and distribution, and broadband communication.

About Damodar Valley Corporation (DVC)
DVC came into existence on the 7 July 1948 by an act of central legislature, as the first multipurpose river valley project of independent India. The members of the Corporation are represented from the central government, West Bengal government and Jharkhand government. DVC has over the years prioritised generation, transmission & distribution of power not only within its Command Area in Jharkhand and West Bengal states but also in exporting to other power-deficit states while retaining its priorities in other functions viz. – irrigation, flood control, soil conservation, etc within its command area. DVC is also instrumental in regard to both capacity addition and rural electrification program of the ministry of power, government of India.