Punjab State Power Corporation Limited (PSPCL) is set to buy GVK Power's 540-megawatt private thermal power plant at Goindwal Sahib in Tarn Taran. The deal involves PSPCL offering Rs 1,400 crore to lenders, facilitating the state's initiative to purchase the private thermal plant.
In July, PSPCL emerged as the sole bidder to acquire the thermal power plant. The utility holds a power purchase agreement with the power unit, ensuring a secured power supply for a duration of 25 years.
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Punjab Chief Minister Bhagwant Mann on December 16 announced through his Twitter handle that the state would acquire a private thermal power plant. "Punjab government is buying a private thermal plant in Punjab... Details (will be out) soon." The move is part of the state government's efforts to strengthen its control over the power sector and ensure a reliable source of electricity generation.
Media reports had earlier mentioned that among the 12 companies initially expressing interest in acquiring the thermal power plant, Vedanta and Jindal Power were particularly keen on sealing the deal. However, the ongoing legal disputes between GVK Power and PSPCL, involving issues such as the total capital expenditure on the plant and reimbursement for the coal used to operate its two units, presented significant challenges and acted as a deterrent to the potential deal.
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GVK Power, the private company operating the thermal power plant, had entered into corporate insolvency last year.
In October 2021, then Congress chief minister Charanjit Singh Channi approved the PSPCL proposal to terminate the power purchase agreement (PPA) with GVK. The decision was attributed to the high cost of power, with the aim of safeguarding the interests of consumers by alleviating the burden of expensive electricity.
The government had initially entered into a PPA with GVK Power during the tenure of the Shiromani Akali Dal-BJP combine.
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