Lanco Infratech Ltd., on Friday said that one of the step down subsidiaries, has entered into power purchase agreements (PPAs) with electricity distribution companies of Telangana and Andhra Pradesh. The power purchase agreements are for a total of 1108 megawatt of power, which means it would operate at 50% plant load factor (PLF) under the gas pooling mechanism for the period October 1 this year to March 31 next year at Rs. 4.70 per KWH.
Lanco Kondapalli is an independent power project (IPP) located near Vijayawada in Andhra Pradesh. The combined cycle gas-based power project is being developed in three phases with a total capacity of 1,476 MW. The realization per unit including the Power System Development Fund (PSDF) subsidy will be Rs 6.14 per kWh, the company said in a release.
Further, Lanco Amarkantak Power Limited (LAPL), another step down subsidiary of Lanco Infratech Ltd, had received a favourable order from the Supreme court directing the South Eastern Coalfields Ltd. to supply coal to 300 MW Lanco Amarkantak unit II, treating it as an unit having a subsisting long-term PPA. Accordingly, LAPL executed the documentation for flexible refinancing with its lenders for 2X300 MW Unit 1 & 2. LAPL has also completed the documentation for the cost overrun financial closure of its 2X660 MW expansion project.
Similarly, three of the other step-down subsidiaries with under-construction power projects also completed the documentation for respective cost overrun financial closure – the coal-based Babandh and Vidarbha power projects each of 1,320 MW capacity and the 76 MW Mandakini hydro power project. In addition, the consortium of lenders to the 500 MW Teesta hydro power project has decided to convert part of their loans in the project into equity under the strategic debt restructuring mechanism as an interim measure pending the induction of a strategic investor into the project.
The company said that these are significant developments giving clear visibility to the completion of these projects costing almost Rs 40,000 crore. With the commissioning of these plants, the company will have a consolidated operating power capacity of around 8000 MW by FY 2018.
The engineering, procurement and construction order book of Lanco, including power and solar projects, stands at Rs 28,158 crore. The financial closure of the cost overrun proposals of the above projects will enable the execution of majority of this order book within the next two years.
The Union government, earlier this year, framed a plan to revive stranded gas-based power generation plants with an installed capacity of 8,262.08MW. It had offered gas at subsidised rates to produce electricity. Lanco is among the companies that successfully bid through a transparent and competitive reverse e-auction process. These stranded gas-based power plants will generate 11.03 billion units of electricity, which will be supplied at or below Rs.4.70 per unit to the purchaser discoms during.October 1, 2015 to March 31, 2016.
For the revival plan, Centre will support with Rs.1,590.09 crore from the Power System Development Fund (PSDF). A total of 15 projects of developers such as NTPC Ltd, Gujarat State Electricity Corp. Ltd, Torrent Power Ltd, CLP India Pvt. Ltd, GVK Industries Ltd, Lanco Kondapalli, GMR Energy Ltd and Ratnagiri Gas and Power Pvt. Ltd were shortlisted for receiving this subsidy as part of the bailout for plants operating at low PLF.