Tata Power acquires 26% stake in Indonesian coal miner BSSR

The co has also signed an offtake agreement to purchase around 10 million tonne (MT) coal every year

Tata Power, India's largest private power producer, said it has acquired 26 per cent stake in Indonesian miner PT Baramulti Sukses Sarana Tbk (BSSR). The acquisition, done through Khopoli Investments Ltd, a wholly-owned subsidiary of Tata Power, would give the power generator access to a part of the 1 billion tonne (BT) coal reserves held by BSSR and its subsidiary PT Antang Gunung Meratus (AGM).

Tata Power had in July this year signed a long-term coal supply agreement with AGM. The company had also entered into a separate agreement with BSSR then which gave Khopoli Investments Ltd an option to take up a 26 per cent stake in BSSR, the Kalimantan-based miner.

"We recognize fuel security as a key to support growth agenda. Thus, besides entering into coal off-take agreement, we have acquired 26% stake in this coal mine as its reserves and outlook is very promising. This acquisition would aim to support our power generation projects in select geographies, to be developed over next few years," Tata Power Managing Director Anil Sardana said.

Currently, Tata Power holds 30% equity stake in PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia(AI) in Indonesia. As part of the deal, Tata Power has also signed an offtake agreement to purchase around 10 million tonne (MT) coal every year. Additionally, a consortium comprising Tata Power, Origin Energy and PT Supraco is developing a geothermal project in Indonesia with 240 Megawatt (Mw) generation capacity.

Tata Power has a current power generation capacity of 6,900 Mw. Its flagship project -- imported coal-based Mundra Ultra Mega Power Project (UMPP) in Gujarat-- is currently facing problems owing to a recent change in coal export regulation by the Indonesian government which pushed up cost of generation. The company is currently seeking a hike in tariff from the Central Electricity Regulatory Commission (CERC) to ensure the project remains viable.