Essar Energy Plc, the power, oil and gas exploration arm of the Ruias-controlled Essar Group which recently got listed on London Stock Exchange (LSE), has signed a power purchase agreement (PPA) with Gujarat Urja Vikas Nigam Limited (GUVNL) for 800 MW of contracted capacity from the 1,320 MW coal fired Salaya II power project to be located in Jamnagar district of the state.
The PPA was signed between GUVNL and Essar Energy's Gujarat arm, Essar Power Gujarat Limited (EPGL) that is valid for a period of 25 years from the start of commercial operations.
Under the terms of the PPA, EPGL will supply power to GUVNL at a levellised tariff of Rs 2.80 per kwh. EPGL was awarded the contract following a competitive bidding process.
The balance of power from Salaya II can be sold by EPGL on the open market.
Commenting on this agreement, Naresh Nayyar, CEO of Essar Energy said, "Today’s agreement continues our long standing and successful relationship with GUVNL and furthers the progress of our phase two development plans to increase our generation capacity from 1,220 MW to more than 11,000 MW by the end of 2014.”
