Tata Power will acquire 50 per cent stake in Zambia's Itezhi Tezhi Power Corp Ltd (ITPC) from Tata Africa for an undisclosed amount.
ITPC, a 50-50 joint venture with the Zambian parastatal utility ZESCO Ltd (ZESCO), is a special purpose vehicle which has been set up to build and operate a 120 MW hydro power plant in Itezhi Tezhi district in Zambia.
"The company has entered into a share purchase agreement (SPA) with Tata Africa Holdings (SA)(Pty) Ltd for formalising the acquisition of their 50 per cent shareholding in Itezhi Tezhi Power Corp Ltd (ITPC)," Tata Power said in a filing to BSE.
ITPC has a 25 year power purchase agreement with ZESCO and is expected to commission the power plant by Q4 2015.
Speaking on the development, Tata Power Managing Director Anil Sardana said, "We are happy to announce our formally acquiring the project in Zambia from Tata Africa, which hold shares as of now. We hope to leverage each of the African venture and our association to become a relevant local player in the African power system."
He further said: "Through this project, we hope to create value for the people of Zambia whilst maximising shareholder value in line with our vision. We hope that with this association we can look forward to forging further relationships in Zambia too."
The closing of the transaction will be subject to various approvals and consents as required under the applicable law, the company added.
Tata Power is the country's leading integrated power company with a growing international presence. The company together with its subsidiaries and jointly controlled entities has an installed gross generation capacity of 8,747 MW in India and a presence in all the segments--fuel security and logistics, transmission, distribution and trading.
