Reliance Industries (RIL) and Adani Power have signed a 20-year power purchase agreement for 500 MW, marking a rare, strategic collaboration between conglomerates led by two of the country’s wealthiest men.
The Mukesh Ambani company will invest Rs 50 crore for a 26% stake in a 600MW unit of Mahan Energen’s thermal power plant. The latter is a wholly owned subsidiary of Gautam Adani-led Adani Power.
Mahan Energen has agreed to allot 50 million equity shares of Rs 10 face value each to RIL at par, Reliance said in a regulatory filing. “The proposed investment by the company is in compliance with the provisions of the Electricity Rules, 2005,” it said. RIL did not disclose any specific purpose for signing the power purchase agreement.
“One unit of 600 MW capacity of Mahan thermal power plant, out of its aggregate operating and upcoming capacity of 2,800 MW, will be designated as the captive unit for this purpose,” Adani Power said in a regulatory filing announcing the agreement with RIL.
Adani Group is investing around Rs 30,000 crore to ramp up Mahan Energen’s power generation capacity to 4,400 MW, Pranav Adani, managing director (agro, oil and gas) and director, Adani Enterprises, said earlier this month. The expansion from the near-term target of 2,800 MW to 4,400 MW is expected over the next decade.
Mahan is located in Singrauli district, Madhya Pradesh. Mahan Energen, which was incorporated in 2005, has a total capacity of 1,200 MW currently. The unit was formerly owned by Essar Power. Adani Power completed