Banking on power demand increasing in the country, Jindal Steel & Power said the falling through of deal for sale of Tamnar unit (1,000 MW) to JSW Energy is good for the company.
JSW last week announced on the exchanges the termination of Rs. 6500-crore deal with JSPL to acquire its 1,000 MW power plant in Raigarh district of Chhattisgarh. The talks were going for a year.
“With the elapsing of the Long Stop Date without completion of the stipulated conditions precedent, the proposed disposal of the said power plant stands terminated,” said the statement of JSW Energy on BSE.
JSPL said the deal has been called off as the conditions precedent mentioned in the agreement had not been achieved but it is good for the company.
“This calling off of the agreement benefits us as the power sector scenario is undergoing a turnaround for the stressed power plants due to some very progressive steps initiated by the ministry of power, government of India,” said Bharat Rohra, Managing Director and CEO of Jindal Power Limited.
Jindal Power emerged as one of the lowest bidder for supply of power for a short period (for three year) at a tariff of Rs 4.41 per unit under a pilot scheme of power ministry for stressed power units without power purchase agreements (PPA). The second and the latest round was called by NHPC for procuring 2500 MW. Rohra said this will result in about 500 MW of additional PPAs for Jindal Power.
“In addition, another pooling scheme is envisaged by the ministry for stressed power plants for aggregation of 2500 MW. Under this scheme the entire surplus capacity of JPL is expected to be tied up and bring back JPL to its past glory,” he said.
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