Thursday morning saw a focus on Adani Power Ltd shares after a wholly-owned subsidiary entered into a 20-year long-term Power Purchase Agreement (PPA) for 500 MW under the captive user policy, as stipulated by the Electricity Rules, 2005, with the Mukesh Ambani-led Reliance Industries Ltd (RIL).
Adani Power and Reliance Industries Forge Agreement on Power Purchase and Ownership Share
Adani Power stated in a BSE filing that one of its Mahan Energen’s 600 MW units, the Mahan thermal power plant, will be identified as the captive unit for this purpose out of its total existing and future capacity of 2800 MW.
“RIL must own a 26% ownership share in the Captive Unit in proportion to the power plant’s total capacity in order to profit from this policy. As a result, it will invest Rs 50 crore in 5,00,00,000 equity shares of MEL to represent the proportionate ownership position, according to Adani Power.
Reliance Industries will buy 500 MW of power on a long-term basis thanks to an exclusive agreement between two corporate entities brought about by this development. APL, MEL, and RIL inked an investment agreement in this regard on March 27 at 7:00 p.m. According to Adani Power, the transaction’s conclusion is contingent upon meeting usual closing requirements, such as obtaining the necessary permissions.
#Reliance enters into a 20-yr power purchase agreement with #AdaniPower arm with an investment of ₹50 cr
⚡️Company to own 26% proportionate ownership in one unit of Adani Power arm MEL, of 600 MW capacity pic.twitter.com/yYCHoMcN6i
— POWER CORRIDORS (@power_corridors) March 28, 2024
Also Read: Adani Group Stocks Crash, Erase Market Cap Worth Rs 90,000 Crore
Adani Power Consolidates Term Loan Facilities of SPVs, Enhances Financial Flexibility
In a separate filing, Adani Power stated that the Ani group firm has combined the standalone term loan facilities of its six Special Purpose Vehicles (or “SPVs”) into a single long-term Rupee term loan facility of Rs 19,700 crore under a consortium financing arrangement made up of eight lenders. This consolidation came about as a result of Adani Power Limited’s credit rating being raised to AA- after the SPVs were merged with itself.
“The revised arrangement will allow the company to benefit from uniform terms and greater financial flexibility in addition to reducing the effective rate of interest,” stated the statement.
