NEW DELHI: Seven companies including RKM PowerGen, Jaiprakash Associates and MB Power have secured contracts to supply 1,900 MW of power to five states.
Power Finance Corp Consulting Ltd, a wholly-owned subsidiary of state-owned Power Finance Corp, awarded the contracts on Friday.
The companies, which also include Jindal India Thermal Power, IL&FS, Avantha Group’s Jhabua Power and SKS Power, will supply power to Tamil Nadu, Telangana, Bihar, West Bengal and Haryana, an official said.
Power purchase agreements (PPAs) with power distribution utilities of these states will be signed after receiving requisite clearances, the official added.
The seven power companies had in July quoted the lowest.`4.24 per unit price in the pilot auction scheme for plants stressed for want of power contracts.
The companies either have fuel supply agreements with state-run Coal India or have tie-ups for imported coal. The contracts will help the plants meet part of their debt obligations, sources close to the development said.
In the auctions, RKM Power-Gen’s Chhattisgarh-based coal project emerged as L1 with.`4.24/unit power supply for three years at state’s periphery.
Other bidders matched the lowest bid to win the contracts.
The pilot scheme assures minimum off-take of 55% of contracted capacity and the tariff will be fixed for three years without any escalation. The fixed cost for the PPA auction will be 1 paisa per unit. As per the tender, the distribution company would get additional discount of 1% in tariff on each 5% extra procurement over 55% of a project’s capacity.
The government had in April kicked off the pilot scheme for procurement of aggregate power of 2,500 MW with PFC Consulting Ltd as the nodal agency and PTC India as PPA aggregator. Initial bids were received for 2,200 MW from eight companies.
The scheme looks to address the issue of stressed assets. Lack of PPAs is one of the key reasons for stress in the power sector, besides factors such as promoters’ equity crunch, no coal supply, and regulatory and contractual issues. Electricity distribution companies have not called long-term contracts in the last few years.
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