New Delhi, Oct 9 (IANS) Ahead of the power ministry finalising developers for two ultra mega power projects (UMPP) of 4,000 MW each, 22 distribution companies of nine states signed the power purchase agreement (PPA) Monday easing a major worry of the prospective investors.
The PPAs were signed in the presence of Power Minister Sushilkumar Shinde and the deputy chairman of Planning Commission, Montek Singh Ahluwalia.
'Signing of PPAs for the 8,000 MW capacity addition through tariff-based competitive bidding marks the beginning of a new approach to capacity addition which will facilitate private investment at a faster pace,' said the power minister.
The two power projects, Sasan Power Ltd in Madhya Pradesh and Coastal Gujarat Power Ltd in Mundra of Gujarat, are among the seven UMPPs proposed by the power ministry to ease the rising demand in the country.
'The entire process of selection of a successful developer for Sasan and Mundra UMPPs is expected to be completed by December end of this year,' Shinde added.
The beneficiary states that signed the PPA are - Delhi, Gujarat, Haryana, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Uttar Pradesh and Uttaranchal.
According to the power ministry, these UMPPs will have scope for expansion and will add about 28,000 MW within a span of 7-8 years. The fund requirement for the proposed projects is estimated to be around Rs.1.25 trillion.
The UMPP initiative of the central government envisages the development of large capacity coal-based projects of 4,000 MW each through a process of tariff-based competitive bidding.
Seven projects, one each in Madhya Pradesh, Gujarat, Andhra Pradesh, Orissa, Maharashtra, Karnataka and Chhattisgarh have already been identified. Two more projects, one each in Jharkhand and Tamil Nadu, are being explored.