Adani Power, Reliance Industries forge 20-year power purchase agreement
Mukesh Ambani’s Reliance Industries has signed a power purchase pact with Gautam Adani-led Adani Power for 20 years to use the plants' 500 MW of electricity for captive use. The agreement involves an investment of Rs 50 crore by Reliance Industries for 26% ownership stake in a Madhya Pradesh power project of Gautam Adani.
In separate stock exchange filings by both the companies, it is mentioned that Reliance will pick up 5 crore equity shares in Mahan Energen, a wholly owned subsidiary of Adani Power, of face value Rs 10 at par (Rs 50 crore) and will use 500 MW of generation capacity for captive use.
"Mahan Energen Ltd (MEL), wholly owned subsidiary of Adani Power Ltd (APL), has entered into a 20-year long-term power purchase agreement (PPA) for 500 MW with Reliance Industries Ltd (RIL), under the captive user policy as defined under the Electricity Rules, 2005," Adani Power said in the filing.
Under this agreement, one of Mahan Energen’s operational 600 megawatt (MW) units at the Mahan thermal power plant will be designated to exclusively supply 500 MW of power to Reliance for the next 20 years. This move allows Reliance to benefit from a long-term stable power supply.
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