Essar Energy plc [LSE: ESSR], the India-focused integrated energy company, today announced that it has signed a power purchase agreement (PPA) with Noida Power Company Ltd for 240 megawatts (MW) of contracted capacity from Essar Energy’s 600MW coal-fired Tori II power station which is under construction in Jharkhand state, India.
The binding PPA has been signed by Noida Power Company Ltd with Essar Energy’s subsidiary Essar Power Jharkhand Limited (EPJL) and has a 25 year duration.
The PPA was secured following a competitive bidding process, with supply of power under the terms of the PPA being due to commence from April 2014.
Under the terms of the PPA, Essar Energy will supply power at a delivered levelised tariff, including transmission costs, of Rs.4.08 per kilowatt hour (approximately 7.6 US cents per kWh), which is the highest long term tariff achieved through competitive bidding in India to date. The levelised tariff net of transmission costs is Rs. 3.27 per kWh (approximately 6.2 US cents per kWh).
The agreement is the first PPA that has been signed for the Tori II project. At its 1,200MW Tori I project, which is also under construction, Essar Energy has already signed two PPAs of 300MW and 450MW, both for 25 years, with the Bihar State Electricity Board.
Naresh Nayyar, chief executive of Essar Energy, said: “We are pleased to have concluded this agreement with Noida Power. We continue to make good progress in securing long term revenues from our power generation projects in India.”
Essar Energy currently has 2,200MW of generation capacity operational, with a further 2,310MW of capacity due to be commissioned this year at the Salaya I, Mahan I and Vadinar P2 projects. Beyond this a further four power projects are due to be commissioned by March 2014, including the Tori I and Tori II projects, which will take Essar Energy’s total to 6,700MW by that date.
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About Essar Energy
Essar Energy (LSE:ESSR) is a world class, low-cost, integrated energy company with an established track record.
Essar Energy, through its subsidiaries, owns one of India's largest private power producers with 2,200MW of installed capacity and projects under construction to expand its capacity to 9,670MW.
Essar Energy, through its subsidiaries, owns one of India's fastest growing private sector oil and gas companies with a diverse portfolio of exploration and production assets. The Vadinar refinery, located in Gujarat, is India's second largest private sector oil refinery with throughput capacity of 18 million metric tonnes per annum and plans to expand to 20mmtpa by September 2012.
About Essar Group
The Essar Group (the "Group") is a multinational conglomerate and a leading player in the sectors of Steel, Energy (Oil & Gas and Power), Infrastructure (Ports, Projects & Concessions) and Services (Shipping, Telecom, Realty and Business Process Outsourcing). With operations in more than 25 countries across five continents, the group employs 75,000 people and has revenues of US$ 17 billion.
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