JSPL MoU renewal hinges on PPA

Last Updated: Sat, Jan 26, 2013 05:58 hrs

The state government has asked Jindal Steel and Power Ltd (JSPL) to sign a power sale agreement with Gridco Ltd ahead of the renewal of the memorandum of understanding (MoU) for its independent power project.

"It appears on record that JSPL has not executed power purchase agreement (PPA) with Gridco till date. You are requested to intimate whether JSPL can execute PPA at this belated stage as per the prevailing rules before extension of MoU," the state energy department wrote to Gridco.

As per the state government policy, all Independent Power Producers (IPP) are bound to sign PPAs with Gridco for selling a fraction of their power output to the state-run power trader at a pre-determined rate. The amount of power sale varies between 12 to 14 per cent of total output. The state government was even pressing MoU signed companies to give an undertaking for providing certain amount of power for free of cost to the state grid. But in the recent letter sent to Gridco, there is no mention of the free power condition, indicating softening of the government stand. JSPL had signed MoU with the government in 2009 for a 1,320 MW coal-fired plant at Boinda in Athamalick area with an investment of Rs 6,000 crore.

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