Essar Energy plc [LSE: ESSR], the India-focused integrated energy company, today announced that it has signed a power purchase agreement (PPA) with the Bihar State Electricity Board (BSEB) for 300 megawatts of contracted capacity from its 1,200MW coal-fired Tori I power station which is under construction in Jharkhand state, India.
The binding PPA has been signed by BSEB with Essar Energy’s subsidiary Essar Power Jharkhand Limited (EPJL) and has a 25 year duration. This follows the issue of a Letter of Intent to EPJL, as detailed by Essar Energy in an announcement on August 18.
The PPA was secured following a competitive bidding process, with supply of power under the terms of the PPA being due to commence from May 2015.
Under the terms of the PPA, the 300MW PPA will involve EPJL supplying power at a levelised tariff of Rs. 3.28 per kWh (approximately 6.7 US cents per kWh) net of transmission costs.
This PPA is the second 25 year PPA to be agreed with the Bihar State Electricity Board for the Tori I project, following an agreement signed in July 2010 for 450MW of capacity at a levelised tariff of Rs. 2.64 per kWh (approximately US cents 5.4 per kWh).
Naresh Nayyar, chief executive of Essar Energy, said: “We are pleased to have concluded this PPA with Bihar. This contract is at a significantly higher tariff than the previous PPA with Bihar and shows we are continuing to make progress in securing revenues from our investments in power generation in India.”
Essar Energy currently has 1,600MW of generation capacity operational, with a further three power projects totalling 2,910MW due to be fully commissioned by March 2012, taking the total to 4,510MW. Beyond this a further seven power projects are under construction, which will take Essar Energy’s total to 9,670MW by March 2014.
Mark Lidiard, Director of Investor Relations & Communications +44 20 7408 8714 or +44 7554 440421
Andrew Turpin, Head of Media Relations +44 20 7408 8702 or +44 7827 283659
Richard Campbell +44 20 7307 5334 or +44 7775 784 933
Nicholas Bastin +44 20 7255 5117 or +44 7931 500 066
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 planning and construction to expand its capacity to 11,470 MW by the end of 2014.
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 14.7 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, Oil and Gas, Power, BPO and Telecom Services, Shipping, Ports and Projects. With operations in more than 25 countries across five continents, the Group employs over 75,000 people, with annual revenues of US$17 billion.
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