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Anil Ambani Group’s Reliance Power has managed a clean and quick exit from the 4,000 MW Tilaiya ultra mega power project in Jharkhand. A little over six months after serving a notice for termination of the power purchase agreement for the project, Reliance Power has done an out-of-court settlement with distribution utilities of 10 States.
Under the settlement, Reliance Power will get Rs. 114 crore in compensation and bank guarantees of Rs. 800 crore will also be released, sources in the know of the development said.
“The settlement was reached at a meeting held earlier this month with a majority of the 18 distribution utilities in the 10 States. The modalities of the transfer of the special purpose vehicle back to the procurers and the release of the bank guarantees as well as compensation are being worked out,” a person in the know of the development said.
Sources told BusinessLine that the termination helps Reliance Power reduce its capital expenditure pipeline by Rs. 36,000 crore — debt of Rs. 27,000 crore and equity commitment of Rs. 9,000 crore. As on September 30, the company’s total long- and short-term borrowings stood at Rs. 31,438 crore.
In April, Reliance Power had sought a termination of the power purchase agreement and an exit from the Tilaiya project.
The company had cited delays, of over five-and-a-half years, on the part of the procurers in handing over land and related infrastructure for the power station.
Reliance Power had won the right to develop the Tilaiya UMPP in 2009 through competitive bidding, with a winning tariff of Rs. 1.77 a unit.
In the aftermath of the termination notice for Tialiya, the Coal Ministry had cancelled one coal mine in Madhya Pradesh — Chhatrasal — allotted to Reliance Power. It had also asked the company to restrict mining from the Moher and Moher Amlohri coal mines to 16 million tonnes.
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