Essar Energy to ink power purchase deal with BSEB

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Essar Energy to ink power purchase deal with BSEB

Essar Energy today said it will be signing a power purchase agreement (PPA) with the Bihar State Electricity Board (BSEB) for 300 MW of contracted capacity from its 1200 MW Tori I power station at Jharkhand.

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Essar Energy today said it will be signing a power purchase agreement (PPA) with the Bihar State Electricity Board (BSEB) for 300 MW of contracted capacity from its 1200 MW Tori I power station at Jharkhand.

BSEB has issued Essar Energy's subsidiary Essar Power Jharkhand Limited (EPJL) with a Letter of Intent (LoI) to purchase power for 25 years and a PPA to this effect is expected to be signed within two months, a press release issued here stated.

As per the agreement, the supply of power from the plant, which is currently under construction, will commence from May 2015, it said.

Under the terms of LoI, the 300 MW PPA will involve EPJL supplying power at a levelised tariff of Rs 3.28 per kWh

In July last year, the company had signed a similar agreement with BSEB for 450MW from Tori I at a levelised tariff of Rs 2.64 per kWh

"This PPA will be the demonstration of progress we are making in securing revenues from our investments in power generation in India, where we currently have 1,600 MW of capacity operational and another 8,070 MW under construction,"Essar Energy Chief Executive Naresh Nayyar said.

Tori I, in the Latehar district of Jharkhand, is a coal fired power project consisting of two units of 600MW each. Tori II is an additional 600MW project.

"The Tori projects will source coal from the nearby Chakla and Ashok Karkata captive coal blocks, which have been secured for the power project. Coal mining operations will begin once the outstanding forest clearance and other permissions have been obtained,"he said.

EPJL has applied to the Government for a temporary coal linkage supply in the event that coal mining operations at the captive coal blocks have not commenced in time for commissioning of the power station or to cover any shortfall in coal as production is ramped up at the mines, Nayyar added.