Maharashtra considers buying stakes in power projects by IPPs

State cabinet to decide on acquisition of 49% or 51% equity; MahaVitaran to ink PPA for drawal of power at Rs 3.20 to 3.30 per unit

The Bharatiya Janata Party (BJP)-led Maharashtra government proposes to pick up equity through its undertaking, MahaGenco, in various power projects set up by independent power producers (IPPs). These coal-based projects with a generation capacity of 2,000 Mw are currently lying idle, or running below their capacity, due to lack of any power purchase agreements (PPAs).

Maharashtra energy minister Chandrashekhar Bawankule told Business Standard: “The state Cabinet will take a call on the acquisition of 49 per cent or 51 per cent equity through MahaGenco in these IPP projects. Some of these projects identified are those developed by Indiabulls, Dhariwal Group, Ideal Power and two other developers situated in north Maharashtra and in the Vidarbha region. The chief secretary has been asked to prepare a detailed proposal in this regard and thereafter MahaGenco will hold talks with IPPs.”

The minister said after acquiring equity, MahaGenco would help IPPs to operate and maintain power plants and improve its functioning with higher plant load factor.

The minister said MahaVitaran would subsequently enter into long-term PPA with these IPPs for the drawal of power at Rs 3.20 to 3.30 per unit. He added that power cost of some of the MahaGenco’s plants was ranging between Rs 4 and Rs 5.20 per unit against the present market rates.

Bawankule said the move to acquire stakes in IPPs is aimed at meeting the requirement of 5,000 Mw during 2020 and 2025. “At present, Maharashtra is power surplus and it will continue till 2020 mainly due to the completion of various projects already launched and proposed by MahaGenco. About 2,650 Mw of MahaGenco’s new generation capacity will be connected between March and December 2016. Besides, MahaVitaran has tied up with IPPs for medium and long-term power purchase,” he said.