Odisha to extend MoUs of 10 IPPs by month-end

IPPs have to retain at least 51% stake in their power projects for a minimum of three years from date of commissioning of their plants

The Odisha government has decided to extend the lapsed memorandum of understanding (MoU) with 10 independent power producers (IPPs).

“Based on the progress made on their projects, we have decided to sign fresh MoUs with 10 IPPs. The new pacts will be signed by the end of this month,” said a senior government official.

The IPPs whose MoUs are to be extended are GMR Kamalanga Energy Ltd, Lanco Babandh Power, Monnet Energy, Jindal India Thermal Power Ltd (JITPL), Ind-Barath Energy Utkal Ltd, CESC Ltd, Visakha Power, Mahanadi Aban Power Ltd, BGR Energy Systems and Maa Durga Power Company Ltd.

As per the proposed new MoU, the IPPs have to retain at least 51 per cent stake in their power projects for a minimum of three years from the date of commissioning of their plants.

Also, any stake sale beyond this lock-in period will need prior permission of the state government.

Besides, the IPPs have to comply with the mandatory clause to promote employment among locals. The clause stipulates that industries setting up their projects in the state have to reserve 90 per cent jobs for locals in the unskilled and semi-skilled category, up to 60 per cent in skilled category and 30 per cent for the supervisory and managerial cadre while giving them the option to fill up the post of senior executives from the open market.

The IPPs also have to take steps to develop ancillary and downstream units around the mother plant. It may be noted that the lapsed MoUs were impeding the progress of power projects since the banks and financial institutions were reluctant to provide funds to the developers.

So far, two IPPs — Sterlite Energy and GMR Kamalanga Energy have commissioned their units. While Sterlite Energy has fully operationalized its 2,400 Mw coal-based plant at Burkhamunda near Jharsuguda, GMR has put on stream two 350 Mw units at Kamalanga in Dhenkanal district.

The rest eight IPPs are in advanced stage of commissioning their projects.

The state government had entered into MoUs with 29 developers for establishment of coal-based projects. Together, these projects have a generation capacity of over 37,000 Mw with the state share being 6,000 Mw.