|Country's largest power producer National Thermal Power Corporation (NTPC) is looking to take over Uttar Pradesh government's 50% equity in the 1,320 mega watt (MW) Meja power project as it seeks to lower the cost of electricity in the state and bring about greater efficiency.|
Meja Utpadan Nigam is a 50:50 JV between NTPC and Uttar Pradesh Rajya Vidyut Utpadan Nigam. Sources told TOI that an announcement is expected soon, although the size of the transaction was not immediately available.
NTPC, which has announced phasing out of 11,000 MW of old and polluting power units, is looking at acquisitions such as the one it recently undertook in Rajasthan to help out states in lowering the cost of power.Recently , it decided to pay Rs. 700 crore to Rajasthan government for its stake in the 1,000 (MW) Chhabra power plant, while taking over debt of around Rs. 3,200 crore.
In case of Meja, which is near Allahabad, NTPC had tied up a Rs. 6,600 crore loan for the project from Power Finance Corporation, which is to be used to refinance costlier loan from a consortium of banks and financial institutions. With a lower interest burden and more efficient operations, the government is hoping that the cost of power will come down, helping the state utility also become more efficient.
Reducing the cost of po wer, especially in power deficient states has been identified as a priority area of reform. Uttar Pradesh government has started steps to terminate power purchase agreements with companies that were seen to be supplying electricity at a higher cost. As first reported by TOI on June 1, Yogi Adityanath government in pulled the plug on projects aggregating 7,000MW capacity , which were yet to take off.Meja was incorporated in 2008 but is yet to be commissioned.