Sasan Ultra Mega Power Project transferred to Reliance Power Limited

The Power Finance Corporation Ltd (PFC) has transferred Sasan Power Ltd. to the selected bidder namely, Reliance Power Ltd. on 7th August, 2007. Reliance Power Ltd. has quoted a levelised tariff of Rs.1.196/Unit for Sasan UMPP, with 6 Units of 660 MW each. Sasan Power Ltd., under ownership of Reliance Power Ltd, will now be responsible for developing the Sasan Ultra Mega Power Project (6x660 MW) at Sasan, District Sidhi, M.P. along with associated captive coal mines. The Power Purchase Agreement, Escrow and Hypothecation Agreements were signed today. Transfer documents were formally exchanged in the presence of Union Minister of Power Shri Sushilkumar Shinde in a ceremony in New Delhi.

The ‘Letter of Intent’ (LoI) for this Project was issued to M/s. Reliance Power Ltd. on 1st August, 2007.

The Government has envisaged a capacity addition of 1,00,000 MW to meet its mission of ‘Power For All by 2012’. Achievement of this target requires the development of large capacity projects at the national level to meet the requirements of a number of States. Recognizing the fact that economies of scale leading to cheaper power can be secured through development of large-size power projects using Super Critical Technology (having advantages of low consumption of coal and lower emissions), Ministry of Power, CEA and PFC are working together for development of 9 Ultra Mega Power Projects (UMPPs) through tariff-based competitive bidding out of which Mundra and Sasan UMPPs have now been transferred to successful bidders. These 9 UMPPs, each with a capacity of about 4000 MW, would also have scope for further expansion. These UMPPs will add about 36,000 MW within a span of 6-8 years and help in achievement of the targets for faster capacity addition. The fund requirement for the proposed 9 projects is estimated to be around Rs.1,60,000 crores.

These projects would be awarded to developers on Build, Own, Operate (BOO) basis. The size of these projects being large, they will meet the power needs of a number of States through transmission of power on regional and national basis.

In order to enhance investors’ confidence, reduce risk perception and get good response to competitive bidding, Shell Companies have been set up as wholly-owned subsidiaries of PFC to facilitate tie-up of inputs, linkages, clearances and tie-ups including water, land and power selling arrangements, obtaining environmental clearance, etc. prior to award of these projects to successful bidders.

Ministry of Power has been playing an important role as a facilitator to coordinate with Ministries concerned and State Governments for ensuring coal linkages, environment and forest clearances, financial closure, execution of PPAs and proper payment security mechanism with State Govt / State Utilities and monitoring the progress of Shell Companies with regard to pre-determined timelines.

Source : Press Information Bureau

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