Financial Daily from THE HINDU group of publications
Wednesday, Aug 25, 2004
Alliances & Joint Ventures
VBC arm signs PPA with Power Trading Corp
Hyderabad , Aug. 24
VBC Industries Ltd, the Hyderabad-based company that had disposed of its bottling and chemical divisions a couple of years ago and diversified into power segment, has entered into a power purchase agreement (PPA) with Power Trading Corporation Ltd.
According to VBC sources, the agreement for sale of power was signed by the company's subsidiary, Orissa Power Consortium Ltd (OPCL). The PPA is for a period of 30 years.
OPCL is implementing three hydroelectric projects, 20 MW at Samal, 18 MW at Jalaput and 60MW at Chitrakonda. It has become the subsidiary of VBC by virtue of the latter holding 19,15,400 equity shares of Rs 10 each out of 26,56,100 equity shares of OPCL, representing 72.11 per cent of holding.
Apart from obtaining necessary approvals and clearances from the Orissa Government and other agencies, OPCL has also signed the wheeling agreement with GRIDCO, Orissa, and requested it to fix the wheeling charges, sources said.
Further, having received the transmission line quotations, which are currently under finalisation, the company has approached the Orissa Electricity Regulatory Commission for waiving the supervision charges by GRIDCO.
For the Samal project, estimated to cost Rs 103.48 crore, the company has already acquired some private land and has taken advance possession of 18 acres of Government land. It is currently pursuing for signing of land lease with the Orissa Government.
Orissa Power has obtained sanction for term loans from Power Finance Corporation, Rural Electrification Corporation and UCO Bank to the tune of Rs 51.9 crore, Rs 20 crore and Rs 80 lakh, respectively. ]
Having estimated Rs 31 crore as equity required for the project, the company has tied up Rs 22 crore and is currently busy to fill the gap of Rs 9 crore by approaching various investors. It expects to commission the project by March 2006, sources said.
For the Jalaput project, OPCL has taken advance possession of the land required for the project and has obtained necessary approvals from the Governments of Orissa and Andhra Pradesh and the Central Electricity Authority (CEA). The company has also entered into a memorandum of understanding with Power Trading Corporation for sale of power for 30 years, subject to approval by the Governments of Orissa and Andhra Pradesh.
Further, OPCL has also obtained approval from AP Transco for the proposed transmission line evacuation scheme with switching station at Jalaput.
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