Board of Approvals – the highest decision making body on SEZs — has deferred a decision on Adani Power’s proposal to transfer its Mundra power plant to a new subsidiary till lenders give a no-objection to the move. The company had last month approved the slump sale of its Mundra power plant to its subsidiary Adani Power (Mundra) Ltd, in which a Gujarat government entity may take a majority stake.
However, an approval of BoA was sought for the sale as it is located at Adani Ports SEZ. “BoA of SEZ has deferred the decision with a query. In its meeting held on July 3, it has decided to defer the proposal of approving the demerger until no-objection certificate is received from the banks,” a company spokesperson said in a statement. The company has approached the lenders for the no-objection certificate.
“We have approached the lenders and once an approval is granted we will take the process forward as required,” it said. “The NOC from the banks would be taken through a meeting conveyed as per the directions of National Company Law Tribunal (NCLT).” BoA of SEZ approval is mandatory to make the demerger effective as per the extant SEZ Act and rules. Adani Power Board of Directors had approved demerger of the Mundra Power to a subsidiary with associated assets and liabilities including bank loans.
Industry sources said Gujarat Urja Vikas Nigam Ltd (GUVNL) — the Gujarat government entity — which buys bulk of the 4,260 MW electricity generated at Mundra – may take 51 per cent stake in the new subsidiary. In May, Adani Power had discontinued 1,250 MW power supply to GUVNL in a phased manner, mainly due to the unviability of running its power plant at Mundra on imported coal.
Of the 2,000 MW provided by Adani Power to GUVNL under different power purchase agreement’s (PPAs), 1,250 MW supply was discontinued. Sources said the company had told the state government that operating Mundra power plant at the tariff specified in the PPA using imported coal (from Indonesia) was unviable after the Supreme Court disallowed raising power tariffs to compensate for rise in price of coal from Indonesia.
Adani Power had entered into a long-term PPA with GUVNL in 2007 for supply of 1,000 MW of electricity at a levelised tariff of Rs 2.35 per unit for a period of 25 years. More supplies were contracted under PPAs signed at different times. It also contracted to sell 1,424 MW of power to Haryana. Mundra plant has a capacity of 4,620 MW, comprising four units of 330 MW each and 5 units of 660 MW each. The 330 MW units are based on sub critical technology and the 660 MW units use the supercritical technology.
Power from the plant is evacuated by two transmission lines — one 433 km, 400 KV transmission line to transmit 1,000 MW from Mundra to Dehegam in Gujarat and another 989 km, 500 KV high Voltage Direct current (HVDC) bipole line with the capacity to transmit 2,500 MW from Mundra to Mohindergarh in Haryana.