Essar Energy plc [LSE: ESSR], the India-focused integrated energy company, today announced that its subsidiary, Essar Power Gujarat Limited, has reinstated a long term power purchase agreement with Gujarat Urja Vikas Nigam Limited (GUVNL), the Gujarat state electricity utility.
The two parties originally signed the power purchase agreement (PPA) on May 11 2010, but Essar Energy subsequently announced on August 19 2011 that it had terminated the agreement due to the non-fulfilment by GUVNL of certain conditions under the PPA within the required timescale.
Essar Power Gujarat has now reinstated the PPA following satisfaction by GUVNL of all conditions subsequent relating to the agreement.
The PPA with GUVNL is to supply 800MW of power over a 25 year period at a levelised tariff of Rs. 2.80 per kWh (approximately 5.7 US cents per kWh) net of transmission costs.
The Salaya II power project, located in the Jamnagar district of Gujarat, is an imported coal fired power project consisting of two generation units of 660MW each. It is scheduled to be commissioned by the first quarter of 2014.
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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 1,600MW of installed capacity and projects under construction to expand its capacity to 9,670MW.
Essar Energy, through its subsidiaries, also 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 14.7 million metric tonnes per annum and projects are under way to increase this 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, Oil, Gas, Power, Communications, Shipping, Ports, Logistics, Construction and Minerals. With operations in more than 25 countries across five continents, the Group employs over 70,000 people, with annual revenues of US$17 billion.
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This announcement contains certain forward-looking statements, including statements regarding Group's plans, objectives and performance. Such statements relate to events and depend on circumstances that may occur in the future and are subject to risks, uncertainties and assumptions. Although the Group believes that the expectations reflected in such forward looking statements are reasonable, there are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements, including, without limitation, the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or licences; fluctuations in demand and pricing in the Oil and Gas, Power and Energy industries; fluctuations in exchange controls; changes in government policy and taxations; industrial disputes; war and terrorism. Further information on the significant risks and uncertainties associated with the Group's business is set out in the Prospectus published on 4 May 2010. These forward-looking statements speak only as at the date of this document. The Group undertakes no obligation to update any forward looking statements whether as a result of new information, future events or otherwise, except to the extent legally required.
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