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Tata Power Company Ltd has announced the acquisition of
the Coastal Gujarat Power Ltd, a special purpose vehicle
(SPV) formed for the 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.(See: Tata
Power leads with lowest bid for Mundra power project;
Lanco leads in Sasan)
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.
Tata Power had provided a performance bank guarantee of
Rs300 crore to 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, Tata
Power, 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 Tata
Power for acquisition of 30-per cent equity stakes in
two major Indonesian thermal coal producers, PT Kaltim
Prima Coal and PT Arutmin Indonesia as well as related
trading companies owned by PT Bumi Resources Tbk. (See:
Tata Power to acquire 30-per
cent stake in $1.3-billion Indonesian coal mines)
The
acquisitions 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,
Tata Power won the bid for Mundra Ultra Mega Power Project
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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