The Uttar Pradesh State Electricity Board (UPSEB) yesterday signed a power purchase agreement (PPA) with Rosa Power Supply Company Ltd, promoters of the 567 mw Rosa power project. The coal-based project which is coming up in Rosa, UP, is being jointly promoted by the Aditya Birla Group and PowerGen of UK. It entails an investment of around Rs 2,450 crore and has a debt-equity ratio of 70:30. The project will be will be executed in two phases of 283.5 mw each.
The PPA is for 30 years. The debt component of the project is Rs 1,715 crore and the equity component around Rs 735 crore. The Birla group, which hold 51 per cent stake in the project, is expected to invest about Rs 375 crore.
The balance will be pumped in by PowerGen. The Power Finance Corporation is also expected to extend some debt funds to the project.
Rosa Power has already got cost clearance from the Central Electricity Authority (CEA). The promoters are now expected to finalise the coal supply agreement and the crucial escrow agreement with the state government.
The promoters and the board had earlier run into a deadlock over the project cost after the electricity board asked them to reduce it by Rs 10 lakh per mw. But when the promoters threatened to the withdraw the project, the board modified this demand and negotiated for a Rs 23 crore decrease in the project cost. Apart from this, due to the uncertainty over cash flows from the board, financial institutions had asked the promoters to produce corporate guarantee. The promoters refused but convinced them that the project would be supported by a bankable escrow agreement from the state government.